Annual demand for steel in the Middle East is expected to grow by 7 per cent a year and hit 30 million tonnes by 2023, despite some serious challenges facing the industry.

Speaking at the Metal Bulletin Middle East Iron and Steel Conference in Dubai, Khalid al-Qadeeri, vice chairman and managing director of Foulath & Bahrain Steel said that the massive investment in infrastructure would continue to drive growth.

“When you look at the projects being planned it is clear that the region will require more and more steel,” Al-Qadeeri said. “As well as the large infrastructure projects you have events such as Dubai’s Expo 2020 and the Qatar World Cup in 2022. These will all drive growth.”

Other positive moves include the prospect of the easing of sanctions on Iran as well as the planned GCC rail network.

However, Al-Qadeeri qualified his statements by stating that there were still some serious challenges going forward. He cited a shortage of gas feedstock, the ongoing civil war in Syria as well as labour issues affecting Saudi Arabia as issues that could hinder growth.

The Middle East currently consumes 20 million t/y of steel with 12 million being produced locally and the rest imported. What that future mix will be dependent on any new projects being granted a gas allocation.

“Expansion is important but the availability of gas and utilities is a very serious issue,” al-Qadeeri said. “It is down to the technology providers and contractors to find a solution that will help us to overcome this problem.”

The executives sentiments were backed by Saeed Ghumran al-Romaithi, the chief executive of the UAE’s Emirates Steel who said that the diversification of usage of domestically produced steel was vital to the future of the industry.

“In the short-term steel will be predominately used by construction, but in the long term I believe that steel’s major usages will be in the manufacturing sector,” he said. “Sectors such as automotive, shipbuilding and consumer goods will use more and more steel.”

The Metal Bulletin Middle East Iron and Steel Conference is being held between 9-11 December.