The UAE’s Emirates Steel has commissioned the first part of its phase 2 expansion programme, increasing its steelmaking capacity to 2.8 million tonnes a year (t/y).

It also diversifies the company’s output range into more sophisticated steel products at a time when demand for steel products in the region is picking up.

The Phase 2A expansion consists of a 1.6 million t/y direct reduction plant and a 1.4 million t/y steel making plant. Direct reduced iron capacity has grown to 3.2 million t/y.

Emirates Steel, which is owned by Abu Dhabi Basic Industries Corporation (Adbic) launched its two-phased $2.45bn expansion programme in 2006. The $816m phase 1 was completed in 2009, rolling output capacity from 750,000 t/y to 2.1 million t/y.

Phase 2B, a 1 million heavy sections mill, will be commissioned towards the end of the year, the company said in a statement.

The Phase 2A casters produce beam blanks, which will provide feedstock for the mill. Before the mill becomes operational, Phase 2A’s continuous casting machine will produce billets that are rolled in the existing bar and wire rod mills of Phase 1.

The expansion is part of Emirates Steel business development plan, which aims to make it a diversified producer, with a product range that includes reinforcing bars (rebar), wire rod, sections, plate, seamless pipe, longitudinally welded pipe, hot rolled coil and semi-finished products.

The company anticipates growth of the regional steel industry, driven by demand based on a recovering construction sector, and increasing investment in the oil and gas, petrochemicals and industrial sectors.

A cheap and reliable supply of gas and energy will help make the domestic steel industry internationally competitive, according to Ahmed al-Dhaheri, projects vice-president at Emirates Steel.