Middle East

The rising demand for stainless steel across various industrial sectors is a significant feature of the growth in the Gulf Cooperation Council (GCC) region. The surge in construction projects and infrastructure development is stimulating the need for materials containing this metal.

Saudi Arabia’s Public Investment Fund has taken a US$ 3.4 billion stake - equivalent to around 10% ownership - in BHP’s nickel assets. Although a relatively small investment for an oil-rich nation like Saudi Arabia, this is seen as signalling the potential start of a massive capital rotation from the oil and gas sector into battery metals like nickel and copper.

Saudi Arabia is working on a large number of ventures which will lead to more commercial buildings, including: the US$ 500 billion Neom futuristic mega-city project; the Red Sea Project - Phase 1, which is expected to be completed by 2025 and will feature 14 luxury and hyper-luxury hotels with 3000 rooms spread across five islands and two inland resorts; the Qiddiya Entertainment City uber-luxury wellness tourism destination; and Jean Nouvel’s Sharaan resort in Al-Ula. The increasing investments in commercial construction projects are expected to create an upside demand for stainless steel.

Meanwhile, UAE steel companies CIM Steel Industry LLC, Rhino Steel, Metal Care Center Factory LLC and Aziz Steel have come together under the Umm Al Quwain Industrial City Authority and are collectively investing nearly US$ 136 million in capital expenditure. When fully operational, these companies are projected to generate annual revenues exceeding US$ 544 million. In line with their preliminary agreement, the four firms are gearing up for a specialized metal zone to showcase their synergies.

The market for stainless steel is bullish. Construction activity in the UAE jumped almost 50% in the second quarter of 2023, despite higher raw material costs. This increase was led by the country’s residential sector (+55%) but commercial and infrastructure were also buoyant, with activity levels up by, respectively, 35% and 44%.