Abu Dhabi-based steel mill is being sold by its owner
The UAE’s Union Iron & Steel (UIS) mill located in Abu Dhabi has been put up for sale by its owner for an undisclosed sum.
A source tells MEED that the 300,000 tonne-a-year (t/y) plant located at Mussafah Industrial City in the emirate has been struggling to survive due to the drop in demand for steel rebar and wire mesh in the UAE’s construction industry.
|Gulf steel rebar market (Million tonnes a year)|
|Other GCC states||2||1|
|Source: Al-Jazeera Steel|
“Three years ago a 300,000-t/y mill pumping out rebar made from imported billets to feed the UAE’s construction boom made perfect sense,” the source says. “Now they are competing against companies like Emirates Steel Industries (ESI) in a tight market and the numbers don’t add up.”
UIS is not the first independent mill to be sold in the GCC. In October, MEED reported that the Bahrain-based joint venture United Steel Company (Sulb) is to acquire the 450,000 t/y United Gulf Steel (UGS) rolling mill at Jubail in Saudi Arabia.
The UGS plant manufactures a range of products that includes equal angles, flat, round and square bars. Billets will be supplied from Sulb’s Hidd Steel Mill complex, which is currently under construction in Bahrain.
Another GGC-based steel industry source confirms that UIS is up for sale, but say that he does not know the asking price for the facility. The source also says that high billet prices are causing trouble for independent steel producers in the GCC.
“There are murmurings in the market that three standalone rolling mills in Saudi Arabia and other GCC countries are shutting down as billets are becoming more expensive than the final product.”
UIS declined to comment on its proposed sale of its plant when contacted by MEED.