The stainless steel and nickel industry in the Middle East is poised for growth despite the challenges facing the sector. The nickel market is highly dependent on demand for stainless steel, which is the primary end use for nickel. Demand for stainless steel is driven by such factors as economic growth, urbanization and infrastructure development.
There are currently more than US$ 2.3 trillion worth of known planned and unawarded projects in the pipeline in the Gulf Cooperation Council (GCC) region. With a booming construction sector in the GCC owing to ever-increasing investments in mega projects in Saudi Arabia and the UAE, demand for stainless steel pipes and tubes is expected to grow consistently in this post-COVID period.
Among the GCC countries, Saudi Arabia is the leader in terms of steel production. Neom (the Kingdom’s flagship project), the Red Sea Project and Qiddiya (the entertainment capital) are some of the key mega projects shaping the infrastructure and construction roadmap. Saudi Vision 2030 is a government plan to reduce the country’s dependence on oil and to diversify its economy via large investments, providing companies such as Al-Jazera and the Rezayat Group with high demand for stainless steel pipes and tubes.
Qatar, Kuwait and Bahrain also have a long list of projects in the pipeline that include: expansions to oil and gas production capacity; new residential and commercial real estate; upgrades to transport, power and water systems; and major industrial developments. For instance, MAN Industries (India) Limited has been awarded an order worth US$ 209 million from Kuwait to supply 170,000 tonnes of HSAW and LSAW pipes to the Gulf state. As a result, manufacturers can meet a wide range of distinct demands by using various alloy mixes and offering a variety of shapes for a number of different purposes.
Oman’s Ministry of Energy and Minerals signed an agreement in March with Knights Bay covering mining concession rights to Block 21 in the Wilayat of Ibra in the Governorate of North A’Sharqiyah. Under the agreement, the UK firm will extract nickel and its derivatives with high purity levels and without any carbon emissions. The agreement is an important step towards achieving the Sultanate of Oman’s strategy to strengthen non-oil industries and to boost economic diversification based on Oman Vision 2040.
The large number of construction and developments projects will lead to a steady demand for stainless steel in the Middle East.
Regarding scrap, meanwhile, the UAE’s Ministry of Economy has extended its ban on ferrous scrap exports, including stainless steel, until September 21 2023. According to the announcement, the ban applies to HS codes 72041000, 72042100, 72042900, 72043000, 72044100, 72044900 and 72045000.