Senior executives in the GCCs steel industry have called for action to stop producers from other countries dumping cheap steel into local market that massively undercuts local companies.
Speaking at the Metal Bulletin Middle East Iron and Steel Conference in Dubai, the executives called for more stringent measures to be taken by GCC governments in order to stop the practice.
The local manufacturing is being hit by other producers selling their steel cheaper than us, said Hilal al-Tuwairqi chairman of Al-Tuwairqi Holdings. Are [the foreign producers] telling us they are friendly with us? No they are our enemy.
Al-Tuwairqi operates a number of enterprises in the steel industry in Saudi Arabia and the executive said he believes cheap steel, predominately sourced from China and Turkey, is hindering the industrial diversification in the region.
The money is going to the traders and the traders are not creating jobs or making anything. Dealing with the local producers means that the money stays in the region, he said.
|Growth in steel use (%)|
|2012||2013 (f)||2014 (f)|
|Central & South America||2.6||6.2||4.3|
|Asia & Oceania||1.8||3.2||2.8|
|*=Finished steel products; f=Forecast; CIS=Commonwealth of Independent States. Source: Worldsteel|
Turkish steel producers do not have to pay any export tax to sell steel in the GCC while GCC producers are hit with a levy of 17 per cent if they export to Turkey.
The cheaper cost of utilities means that steel is about $35 per tonne cheaper to produce in the GCC nations. However, in Turkey the 17 per cent levy means GCC-produced steel is $105 per tonne more expensive than domestic supplies.
It is important to differentiate dumping and competition, Khalid al-Qadeeri, vice chairman and managing director of Foulath & Bahrain Steel said. [Local] producers will improve quality and lower costs if there is competition. Dumping is very different.
Al-Qadeeri called for the GCC to bring in tighter regulations that would deter countries from dumping cheap steel into the region.
The Metal Bulletin Middle East Iron and Steel Conference is being held between 9-11 December.