The Western media has been scratching its collective heads for the past fortnight as it wonders how a tiny Gulf state such as Qatar managed to be awarded the rights to host football’s 2022 World Cup.
While they contemplated, GCC steel industry executives took out a calculator and started estimating how much steel 12 stadiums are going to need. Without being too specific, the answer was an awful lot.
What makes it even better for the region’s steel producers is the fact that one of Qatar’s bid criteria was that the majority of the stadiums will be dismantled and given away to poorer nations after 2022. This means that they will use steel sections and beams in their construction, as they will be easier to take apart.
Over the next decade, Qatar will be alongside Iraq and Saudi Arabia as a major buyer of the GCC’s steel and it is up to the region’s producers to ensure that they have the facilities in place to take full advantage.
Integration is the key and all of the steel industry acknowledges that controlling costs by having access to raw materials is the way to ensure the future. Such integration is not cheap however and will surely mean the end of the road for many of the region’s independent steel producers.
The steel boom may be already happening in Saudi Arabia, but it is still at least two to three years away in Iraq and Qatar. This gives companies adequate time to increase capacities accordingly.
If oil prices remain stable, the next decade is going to witness growth in the Middle East that is completely unprecedented. Local steel producers need to be ready, because it is certain that competitors from steel hubs such as Turkey, Russia and China will be.