Saudi Basic Industries Corporation (Sabic) has put plans to build two steel plants in Saudi Arabia on hold while it carries out further feasibility studies.

MEED reported in June 2013 that both plants will be built and operated by Sabic’s steel subsidiary Hadeed and will have a combined capacity of 2.5 million tonnes a year (t/y). However, there will now be a delay while the practicalities of each project are further explored.

There is a gas allocation in place and sources in the kingdom believe the delays do not involve an issue with feedstock.

“The gas is there for this project,” says a steel industry source based in Saudi Arabia. “What is less clear is the feasibility of the mooted product slates. There will be further studies carried out and more discussions are sure to take place between Hadeed, Sabic and the Oil Ministry about the best way to move forward.”

One of the proposed plants is a plate mill, which will be built at Hadeed’s existing complex at Jubail in the Eastern Province of the kingdom. The mill will have a capacity of 1.5 million t/y and will house a direct reduced iron facility with a capacity of 2 million t/y. The excess DRI will be used internally by other facilities within the Hadeed complex.

The second project is a cold mill and will be constructed at Rabigh on the Red Sea coast of the kingdom. The greenfield plant is aimed at providing raw materials for use in several downstream industries, including automotive and electrical. The product slate will include 150,000 t/y of cold-rolled products and automotive sheets, 350,000 t/y of hot-dip galvanised steel sheets and 350,000 t/y of tin plate product.

The facility will also produce an as yet undetermined amount of electrical sheets to be used in the power industry.

Sabic initially stated that both plants would be in operation by 2018, but a question mark now hangs over this date. Adhering to the expected three-year construction period, contract awards would have to be made by the end of 2015 for this to go ahead, which is still feasible.

Sabic products and production*

Long products

  • Rebar
  • Wire rod
  • Billets
  • Light sections

Total production 3.3 million tonnes

Flat products

  • Hot-rolled coil
  • Cold-rolled coil
  • Hot-dip galvanised coil
  • Pre-painted coil

Total production 2.2 million tonnes

*=2013. Source: Sabic