The rate of growth in steel demand in the Middle East and North Africa (Mena) region is expected to increase in 2013 and 2014, driven by reconstruction projects in Iraq and post-revolution Arab countries.

The latest outlook from international trade body World Steel Association (Worldsteel) has forecast a 3.2 per cent rise in demand to 65 million tonnes this year, compared with an increase of 2.2 per cent in 2012. In 2014, demand is predicted to surge 7.1 per cent.

“[Steel growth in Mena is] aided by reconstruction activities in the Arab Spring countries and Iraq as political turmoil in the region phases out,” said Worldsteel, which reported that demand in the region dropped 2 per cent in 2011 owing to political unrest.

Excluding North Africa, steel consumption in the Middle East contracted by 1.2 per cent in 2012 but is expected to grow by 0.8 per cent and 6.1 per cent respectively in the next two years.

Out of the global market, only African steel demand growth will be higher than Middle Eastern growth in 2014, according to Worldsteel’s forecasts.

Growth in global steel demand is forecast to grow 2.9 per cent in 2013 compared with 1.2 per cent last year, as consumption in Asia picks up and demand erosion in the EU is reduced.

Despite a forecast of high demand growth in the region, question marks remain over several major steel production projects planned in the Middle East.

One of the biggest schemes at the planning stage is Al-Rajhi Steel Industries’ estimated $3bn steel complex at King Abdullah City in Saudi Arabia.

The original plan for the Al-Rajhi complex included a direct-reduced iron (DRI) plant producing 1.8 million tonnes a year (t/y) of steel and several downstream facilities.

But uncertainty surrounds the project after Al-Rajhi rejected commercial and technical bids for engineering, procurement and construction (EPC) at the start of 2013, due to the proposals being over-budget. There is still no timeline in place for the scheme.

Another major project in the GCC it Emirates Steel Industries’ phase 3 expansion in Mussafah, Abu Dhabi. The estimated $1bn project is still in the bidding stage and, despite bids being submitted in the second quarter of 2012, the decision is yet to be made on a winning bidder.

Meanwhile, Oman Oil Company (OOC) and Steel Authority of India’s (Sail) 3 million t/y steel project in Dhofar, southern Oman, is still in the early stages after an initial agreement was signed in November 2011.

For 2012, Worldsteel estimated Middle East steel production at 24.2 million tonnes, with consumption double that at 49 million tonnes.

Without significant new capacity additions in the next five year, the Middle East will continue to be a significant net importer of crude steel, despite efforts by regional governments to expand into metals and other non-oil industries.