The outlook for the Middle East has improved in the past few months, with the increased pace of recovery in the third quarter supported by progress on COVID vaccinations, the easing of virus-related restrictions and higher oil output. The economy now looks set to reach its pre-pandemic level by the end of 2021. Although the Delta variant is causing concern globally and is becoming significant in the Middle East, regional GDP is expected to grow by 2.6% this year.
Business conditions in the UAE’s non-oil economy have showed robust improvement, largely driven by the ongoing World Expo in Dubai which is said to have supported the recovery in contracts. In June, the central bank forecast that the UAE’s real GDP growth would reach 2.6% this year and 3.8% in 2022.
Current conditions have hit 304 and 316 stainless steel particularly hard while less expensive 430 stainless is also becoming increasingly difficult to find; news has been received that no more 430 will be produced before 2022.
The reason behind the shortage is that China and India are currently uninterested in steel and stainless steel exports because their domestic economies are running at full speed and material can be sold locally at more attractive prices than in the export channel. This is fuelling a worldwide stainless steel shortage and there are local procurement problems in the Middle East for certain stainless steel commodities.
The global nickel market achieved a volume of around 2.5 million tons last year. In latest developments, the metal is seeing an uptick from the downtrend at the end of July and, at the time of writing, is at its highest since September 24.
Production is being curbed owing to the power crisis in China and high electricity costs in Europe. According to rating agencies, nickel demand for EV battery manufacturing will experience an annual average growth rate of 29% over the period from 2021 to 2030.
Rising demand for corrosion-resistant alloys in the oil and gas industry is one of the key factors driving the growth of the market. Furthermore, the development of high-density nickel-based batteries to meet the power requirements of a growing population is also contributing to market growth.