Business & Finance Club Magazine - Eye on the Economy - JEDDAH - The increase in real estate projects in different parts of Saudi Arabia, coupled with government initiatives, are currently the key boosters in an upsurge in steel consumption in the country.
 
As such, Saudi Arabia represents one of the fastest growing steel industries in the Middle East, a new industry report said on Friday.

Over the past few years, the rapid economic development has led to skyrocketing growth in the construction and infrastructure industry, which has boosted steel demand in the Kingdom.

According to a new research report by RNCOS titled “Saudi Arabia Steel Industry Forecast to 2016”, steel consumption in Saudi Arabia has rapidly surged over the past few years on the back of construction boom, growing investment in real estate and cheap & reliable gas/energy supply.

Economic growth has also contributed substantially to raise domestic steel consumption by accelerating business activities. “In fact, the impact of economic slowdown on the real estate projects was minimal,” the report said.
“Out of the total real estate projects worth $543 billion, mere 4 percent have been cancelled or delayed. Hence, all these factors have fueled the consumption of iron and steel in the Kingdom to reach around 14.8 million metric tons in 2009, the report noted.

At present, the steel industry in Saudi Arabia is highly import oriented, it further said.

In 2008, the Kingdom imported around 6.3 million metric tons of steel, which accounted for majority of domestic steel consumption, the report added.

“However, the situation is expected to reverse in future with the escalation of domestic production. We anticipate that the share of imported steel will see a downward trend in coming years as several major capacity expansion plans of manufacturers are in the pipeline.”