Dubai: A ‘UAE Steel Producers Committee’ has been set up at a time when the industry is having its best year in decades – and also facing massive challenges set off by supply disruptions from the pandemic breakout last year. Steel prices have surged more than 40 per cent in the last 12 months, bringing opportunities in its wake.
The Committee, registered under Abu Dhabi Chamber of Commerce, brings together 15 manufacturers with a combined annual production of 5 million tonnes plus. “The UAE needed such a grouping for the steel industry,” said Anil Taurani, Vice-Chairman of the Committee. Saeed Ghumran Al Remeithi – CEO of Arkan and of Emirates Steel, is the Chairman of the Committee.
“Because the industry needed direction on what to do next, which categories we should be doing better, whether we need more steel plants, etc.,” said Taurani, who is Managing Director of Taurani Holdings.
“When a group of like-minded entities are formed, it gives us a better platform to handle issues common to the industry.”
A year like no other
Prices for UAE-produced steel are currently averaging $700-$900 tonnes, which is 40-50 per cent from what they were a year ago. As for imported steel, costs would be well upwards of $1,000 a tonne, as higher shipping costs – especially from China - too come into the picture.
“This price gap has helped UAE steel producers meet demand locally as well as from the US and Europe, where construction has picked up,” said Taurani. “Steel buying has almost doubled in these 12 months, and exports too have climbed.
“I have not seen anything like this in the last 40-45 years.”
While the pandemic caused havoc on supplies from China, in recent months the government there has scaled back export incentives for its steel makers. All of which have contributed to making steel from China come in at higher prices. The big steel producers there have also cut down on their output.
Next year could see more of the same, though there is talk of steel prices cooling off a bit. The Committee representatives foresee UAE demand to pick up even more, especially for industrial purposes.
Industry sources say that dumping of steel by Oman and Saudi manufacturers remains a problem for their UAE peers. Efforts at reaching some sort of understanding have failed to bring about results.
According to Taurani, “Raising import duty on imports of GCC steel into the country is not a solution on the table because the UAE believes in free markets, especially GCC made products. Dumping remains a big challenge for the industry. We will have to come up with ways to tackle it other ways.”
The newly created UAE Steel Producers Committee will thus have their work cut out.