Outlook for the Middle East Steel Industry out to 2015

China-Middle East Steel

Outlook for the Middle East out to 2015
2014 has not been without its challenges, and 2015 will
also be another difficult year. However, on average MBR
believes that rebar prices on average will only be 3-5%
lower compared to 2014 on a GCC cif basis. Despite
these challenges to steelmaker margins in the Middle
East, our outlook remains bright for the region. We
present our arguments to validate this view below.

The region in 2014 remained one of the fastestgrowing
in terms of steel production and
consumption, second only to Asia. GCC finished
steel consumption rose by 6.0% in 2014 and is
forecast to further grow by 6.1% in 2015.

Government federal budgets are largely set now.
Although based on nominal oil prices, it is our
view that the vast majority of the governments in
the region are still committed to large long-term
infrastructure and social investment – in part for
political reasons to avoid another Arab Spring.

Many of the Gulf economies have recorded large
budget surpluses for the past three years. They
would be willing therefore to run short-term
deficits in order to continue these investments.

Regional DRI-EAF producers are still extremely lowcost
thanks to low-priced natural gas, which is priced
well below international levels. Moreover, these are
often fixed under long-term contracts providing
substantial advantages over the longer-term. Other
subsidies include long-term power contracts or
discounted power access or access to state-backed
financing. There are also buy-local schemes in GCC
markets such as Kuwait that provide financing based
on buying locally-sourced steel.

The recent complaints about China may fade
in 2015 as less Chinese material arrives into
the Middle East. There are two parts to this

First we factor in that China has amended its
export tax rebate in January 2015. The removal
of the VAT rebate on alloy long product exports
will add around $40/tonne or so to Chinese
export costs.

Secondly, in our opinion, it has been relative
cost advantages that have fuelled a large part
of Chinese export volumes we have seen in
2014. We expect this dynamic to change from


This view is more convincing and powerful if we

take the running assumption that the Chinese
government will act to further stimulate steel
demand growth next year. There are three key
reasons why:
i) Falling oil prices and metals prices in China will
naturally give a positive boost to manufacturing
and stimulate internal-led GDP growth.
ii) Rising deflation makes borrowing more
expensive and for those Chinese firms who are
indebted makes it harder for them to service
their debts
iii) Rising deflation presents new room for the
Chinese government to go beyond the recent
surprise changes to interest rates and provide
further growth monetary stimulus to the

Given that China is therefore moving into a deflationary
period this means that to regain credibility and policy
effectiveness the Chinese government will need to ease
monetary policy much more, probably in the form of
lowering the reserve requirement ratios among China’s
banks at least throughout the first half of 2015. This
would be a positive move to mitigate Chinese steel
exports to global markets for 2015.
In conclusion and in our opinion, 2015 will mark the
low-point for global steel products for several years,
however, steel prices are not expected to dramatically
fall for the reasons outlined above. Fundamentally,
there will be a recovery through 2016 – albeit with
continued cyclicality and with Chinese mills capping
any major price increase with rising exports.


Why steelmaker attempts at further trade
protectionism in 2015 will utimately fail
Steelmakers in the Middle East are clamouring to seek
out legal advice as to how they can copy Egypt (in the
case of Turkish rebars) and others and look to protect
their markets from imports beyond the current 5%
import duty.
Irrespective, in many circumstances, we do not
believe that governments will provide additional
protection steelmakers may look to seek. There will
be little rest bite among regional steelmaker margins
in 2015. We list some key reasons below:

In many countries, it is the state that drives
much of the infrastructure expenditure
on which steel consumption is based.
Cheap housing for a growing young Arab
population is a key priority for many
governments. By protecting the domestic
steel industry, it would therefore ensure
that it pays a higher price for its capital

It also passes the cost down to further steel
processing or manufacturing industries.
These then pay a higher price and are then
even less able to be competitive with imports.

With many regional governments seeking

to diversify their economies and encourage
manufacturing, we find it hard to believe that
they will act to widely damage manufacturing
industry by protecting the steel industry.
According to a recent report, the Arab world
needs as many as 17m new jobs by 2020
based on demographic calculations.

Finally, many countries either do not have
the right legal infrastructure/frameworks
to best deal with such complicated trade
issues, or the decision-makers at the
very top would have their own business
interests affected by higher steel costs. So
regional steelmakers can prepare all the
documentation and reports they want to try
and prove a convincing case for hiking up
import tariffs, but this will continue to find a
lack of support or drive at many of the key
levels of government.


Direct Reduced Iron Technologies & Measures

Technology or Measure Energy Savings Potential CO2 Emission Reduction Potential Based on Literature Costs Development Status
Midrex© Process Total primary energy demand of the process is around 10.4 GJ/t. The natural gas consumption of eficiency Midrex plants are aruond 9.62GJ/t-DRI.  Some MIDREX plant/EAF facilities emit only one-third of the CO2 per tonne of steel of a BF/BOF complex (IEA, 2009. p.68)   Commercial
HYL III Process The energy consumption of the process is 10.4 GJ/t-DRI.  IEA reports that CO2 emissions of steel produced from 100% natural gas based DRI is between 0.77 to 0.92 t-CO2/t-steel.    Commercial

Energy consumption of the technology is 12.3 GJ/t-HM (APP, 2010. p.53).

Fastmet process reduces CO2 emissions by 1,24 t/t-HM (APP, 2010. p. 53). 

ITmk3® Process

This technology reduces energy consumption by 3 GJ/t-HM and 10 GJ/t-HM as compared to large- and small-scale blast furnaces. No electrictiy is used (Tanaka 2007. p. 10).

CO2 reduction of 1 tCO2/t-HM is expected.

Midrex with CO2 Removal System

This process is reported to reduce natural gas consumption.

According to the information provided by the company, If the removed CO2 is used for enhanced oil recovery, sequestered underground, or sold into a pipeline, stack CO2 emissions per ton of DRI are reduced by 250 kg/t DRI, about 50%.

Midrex expects that in most cases, the technology will result in a net decrease in operating cost.

MXCOAL™ – Midrex© with Coal Gasification

Not available

Not available

Low quality and low cost coal is used.

Coal-Based HYL Process

This technology does not require coking coal, coke and natural gas. Production of hot DRI that could be charged to EAF to achieve significant energy savings.

Environmental benefits are comparable to Blast Furnace route.

Low quality and low cost coal is used.

Dust Recylcing in Rotary Hearth Furnace

Fuel ratio of BF decreases to 0.2kg/t-Pig Iron. JSIM reports the energy saving of 1400 TJ/year achieved by installing 2 units of this system in Japan.

Lower emissions due to reduced energy consumption.

This technology results in waste reduction and therefore decreases the disposal costs.

SL/RN Process

Energy consumption decreases because no coke oven and sinter plants are required. Total electricity consumption is 999.74 kWh/metric ton liquid steel.

Total CO<sub<2< sub=””> emissions are 3.2 t/t-liquid steel.

Investment and operational costs of the process are reported to be $344.4 and $183.1 per ton of steel, based on a scrap cost of $120/t-scrap (US DOE, 2003. p. 4/4.)

Waste Heat Recovery for Rotary Kiln Direct Reduction

The coal consumption is about 800 kg/t DRI.

Significant CO2 and particulate matter emissions are the limitations of the process.

Low capital cost is expected since pelletizing or sinter plants are not required.


Finmet process gas usage is 12.4 GJ/t-DRI which is lower than Blast Furnace.


Installation costs for a 1.0–1.1 Mt/y plant was reported to be ~ €165 million for equipment and ~€35 million for construction (VATech, 2003)

Capital cost investments are estimated to be $263.5/t-steel. Operational costs are estimated at $185/t-steel (with a scrap cost of $120/t-scrap) (DOE, 2003. p.21, 25)

Iron Carbide Process

Energy input to the process is reported to be 12.6 GJ/t-product (IPPC, 2009. p.500).

Total COemissions from the process are reported to be 2.17 t CO2/t-steel.

Capital expenses for the process are estimated to be $347.6/t-steel. 
Production costs are estimated to be lower than other DRI processe.


Gas usage of the process is reported to be 11.5 GJ/t which is lower than Blast Furnace (IEA, 2007. p. 133).

Electricity consumption per ton of liquid steel produced through Circored-HBI-EAF route is reported to be 901 kWh/t-steel (US DOE, 2003. p.4/24).

Process related and total (including electricity) CO2 emissions of the process are reported to be 1.2 and 2.02 t/t-steel (US DOE, .

Capital and operational costs for the process is reported to be $232.4/t-steel and $185.3/t-steel (based on scrap cost of $120/t-scrap) (US DOE, 2003. p.4/4)


Less energy usage since no coke oven is required. Electricity consumption is estimated to be around 690.3 kWh/t-steel (US DOE, 2003. p.4/4).

Total CO2 emissions of the process are estimated to be around 1.992 tCO2/t-steel (US DOE, 2003. p.4/4).

Capital and operational costs are estimated at $334.7 and $190.7/t-steel, respectively (US DOE, 2003. p.4/4).

Sustainable Steelmaking using Biomass and Waste Oxides

Productivity gains as high as 50% could be achieved replacing coal with Wood Charcoal. An Increase of less than 5% in total carbon consumption is achievable.

If Wood charcoal is used for Iron production net CO2 and sulfur emissions can be significantly reduced.

Suspended Hydrogen Reduction of Iron Oxide Concentrates

This technology will require ~ 38% less energy than the blast furnace process or 7.4 GJ/ton of hot metal.

Even when natural gas or coal is used significant reduction in carbon dioxide emissions 39% and 69% of the Blast Furnace value, respectively are estimated.

Low cost raw materials can be used.


This technology will consume less energy than other natural gas based DRI technologies.

Reduction in emissions will occur when the technology is Used with CCS.

Cost of reformer are avoided.

Paired Straight Hearth Furnace

It enables higher productivity smelting operations. When used as a pre-reducer with a smelter,the combine Process is suitable BF/Coke oven replacement with 30% less energy usage.

In comparison with Blast Furnace route, the total CO2 emissions per ton of hot metal produced is expected to decrease by one third.


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World crude steel output increases by 15% in 2010

World crude steel production reached 1,414 million metric tons (mmt) for the year of 2010. This is an increase of 15% compared to 2009 and is a new record for global crude steel production.

All the major steel-producing countries and regions showed double-digit growth in 2010. The EU and North America had higher growth rates due to the lower base effect from 2009 while Asia and the CIS recorded relatively lower growth.

In December 2010, world crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 116.2 mmt, an increase of 7.8% compared to December 2009. The crude steel capacity utilisation ratio of the 66 countries in December 2010 declined slightly to 73.8% compared to 75.2% in November 2010. Compared to December 2009, the utilisation ratio in December 2010 is 1.1 percentage point higher.


Annual production for Asia was 881.2 mmt of crude steel in 2010, an increase of 11.8% compared to 2009. Its share of world steel production increased to 65.5% in 2010 from 63.5% in 2009. China’s crude steel production in 2010 reached 626.7 mmt, an increase of 9.3% on 2009. China’s share of world crude steel production declined from 46.7% in 2009 to 44.3% in 2010. Japan produced 109.6 mmt in 2009, 25.2% higher than 2009. In 2010, South Korea’s crude steel production was 58.5 mmt, a 20.3% growth compared to 2009.

The EU recorded an increase of 24.5% compared to 2009, producing 172.9 mmt of crude steel in 2010. However, crude steel production in the UK and Greece continued to decline in 2010.

In 2010, crude steel production in North America was 111.8 mmt, an increase of 35.7% on 2009. The US produced 80.6 mmt of crude steel, 38.5% higher than 2009.

The CIS showed an increase of 11.2% in 2010, producing 108.4 mmt of crude steel. Russia produced 67 mmt of crude steel, an 11.7% increase on 2009 and Ukraine recorded an increase of 12.4% with a year-end figure of 33.6 mmt.

Table 1: Top 10 steel-producing countries

Rank Country 2010 2009 %2010/2009
1 China 626.7 573.6 9.3
2 Japan 109.6 87.5 25.2
3 US 80.6 58.2 38.5
4 Russia 67.0 60.0 11.7
5 India 66.8 62.8 6.4
6 South Korea 58.5 48.6 20.3
7 Germany 43.8 32.7 34.1
8 Ukraine 33.6 29.9 12.4
9 Brazil 32.8 26.5 23.8
10 Turkey 29.0 25.3 14.6


Source: World Steel Association






海湾合作组织国家中,去年位于迪拜的明星钢公司(Star Steel)和海湾联合钢公司(UGS)的新建轧钢产能投产,酋长钢工业公司(ESI)位于阿布扎比的阿联酋首座大型直接还原铁厂和小方坯厂也顺利投产。此外,随着阿联酋哈姆利亚钢公司(Hamriyah Steel)和Conares金属供应公司新增140万t轧钢产能将在2010年投产,未来中东北非地区新建产能投产不会停止。





与私营企业和国际大钢铁企业合资的国有钢厂大都推迟了新扩建项目,主要是由于私人投资者担心,市场长期需求低迷,而企业负债水平过高。目前中东北非国有财团试图打消私人投资者的疑虑,增加推迟项目的融资额,推动项目尽快实施,如巴林Foulath公司和日本Yamato Kogyo公司合资的 SULB项目,计划2012年投产;位于沙特阿拉伯朱拜勒的安赛乐米塔尔合资无缝管厂项目。











中东北非钢厂经营得益于政府实施的关税壁垒和非关税壁垒抑制进口增长。海湾合作组织成员国家钢材进口关税为5%,其他中东北非国家也征收一定的关税税负。此外,发货期短、较低的信贷和运营资金成本,以及紧密的业务关系,都意味着中东北非当地钢材供应商的售价低于国际市场5%~10%。如果定价高于这一价位,将引发进口增长。今后两三年内,中东北非市场供应过剩,价格较低,因此钢厂为了寻求保护本地市场,有可能提出更多的反倾销指控。 (未完待续)


钢厂,地点,设备供应商 项目情况 状态
Sulb项目,巴林-Foulath公司和Yamato Kogyo公司合资项目,SMS Concast/Meer 公司、Samsung SECL公司和神户米德雷克斯公司提供设备 直接还原铁产能和联合钢厂,一期工程包括80万t大中型钢厂 钢厂建设招标工作于2010年初完成,新项目将在之后的30个月内投产
伊兹钢铁公司,埃及,达涅利公司提供设备 完成以直接还原铁为原料的炼钢厂和辅助设备,包括:115 t FastArcTM 电炉、90万t 5流FastCastTM小方坯连铸机、原料自动转料系统、190万t Energiron III直接还原铁厂 2008年7月完成订货,预计2010年6月投产
伊兹钢铁公司,埃及,达涅利公司提供设备 两座棒材厂,总计产能100万t 预计2010年4季度投产
Beshay钢公司,达涅利提供设备 40万t小型型钢厂 2009年2季度已经投产
Beshay钢公司,西门子奥钢联工程技术公司提供设备 100万t小方坯钢厂 正在实施
埃及海绵铁公司,Beshay钢公司下属企业,米德雷克斯公司提供设备 175万t直接还原铁厂,165t电炉和钢包炉,6流小方坯连铸机,生产130万t棒材和型钢,以及热、冷直接还原铁 直接还原铁厂和钢厂将在2011年投产
苏伊士钢公司,达涅利公司提供设备 无头轧制棒材厂,小时产量70t,2008年3季度已经投产;新建电炉钢厂生产128万t小方坯、大方坯、异型坯钢厂,还有195万t高碳直接还原铁厂 2010年2季度投产
阿尔法钢铁公司,阿尔坎,日本神户钢铁公司提供米德雷克斯技术 80万t直接还原铁产能,供应80万t短流程钢厂 2010年直接还原铁厂投产,2011年钢厂投产
Ghadir钢铁公司,阿尔坎,日本神户钢铁公司提供米德雷克斯技术 80万t直接还原铁产能 2011年上半年投产
霍尔木兹甘钢铁公司,伊朗矿业发展与改革组织,神户钢铁公司提供米德雷克斯技术 82.5万t直接还原铁产能和150万t板坯产能 2009年初投产
伊朗矿业发展与改革组织,阿巴斯,霍尔木兹甘,西马克德玛格提供设备 两座75万t电炉,两座75万t钢包炉,150万t板坯连铸机 2009年已经投产
Sangan矿山开采项目,达涅利提供设备 采矿、精选、球团产能,年产用于直接还原的球团260万t 2009年4季度已经投产
胡泽斯坦钢铁公司,达涅利提供设备 110万t热轧宽中厚板 2009年2季度已经投产
霍拉桑钢铁公司,神户钢铁公司提供米德雷克斯技术 两座80万t直接还原铁厂,一座新建,一座扩建 第一座已经投产,第二座2011年上半年投产
穆巴拉克钢铁公司,伊斯法罕,SMS Mevac提供设备 140万t RH产能 正在建设,2010年投产
约旦钢铁公司,Ansaldo Sistemi工业公司提供设备 现代化改造棒材轧钢厂 2010年完成投产
联合钢铁公司,达涅利提供设备 87.5万t小方坯产能 2010年1季度投产
利比亚钢铁公司(Lisco),达涅利提供设备 80万t棒材厂 2010年1季度投产
钢厂和新建地点不详,达涅利提供设备 完成新建70万t钢厂,包括:80万t FastArc电炉、LF炉、4流FastCast小方坯连铸机和全部辅助设备 2010年1季度投产
钢厂和新建地点不详,达涅利提供设备 45万t棒材厂,70万t炼钢产能 2010年3季度投产
马格里布钢铁公司,卡萨布兰卡的艾因塞巴,西马克德玛格提供设备 100万t两机架炉卷轧机,2009年投产;50万t中厚板厂,100万t电炉钢厂、LF炉和板坯连铸机 正在建设中,2011年投产
Shadeed钢铁公司,索哈尔,米德雷克斯提供设备 150万t直接还原铁厂,向110万t小方坯厂供应原料 计划2010年直接还原铁厂投产,但钢厂正在进行出售谈判
卡塔尔钢铁公司,Ansaldo Sistemi工业公司提供设备 改造高压配电站 2009年完工
安赛乐米塔尔钢管公司,朱拜勒,SMS Meer公司提供设备 60万t油井用无缝管,产品口径为4.5-16英寸 2009年已经投产
沙特阿拉伯钢铁公司,达涅利公司提供设备 100万t钢厂,生产小方坯和长材 2011年3季度投产
Jesco,达涅利公司提供设备 40万t无缝管厂,产品口径14英寸 2009年4季度已经投产
Rajhi钢公司,达涅利公司提供设备 100万t棒材厂,改造85万t小方坯厂 2011年3季度投产
南方钢公司,吉赞,西马克公司提供设备 100万t电炉钢厂,包括:140t电炉、140t LF炉、板坯连铸机 2010年投产
南方钢公司,吉赞,西马克公司提供设备 100万吨电炉钢厂,50万t钢筋厂 正在建设
海湾联合钢公司,达涅利公司提供设备 80万t电炉钢厂,生产最大规格600mm型钢 2011年投产
Atoun公司,西门子奥钢联工程技术公司提供设备 75万t棒材厂 正在建设
Medsteel公司,西门子奥钢联工程技术公司提供设备 40万t小方坯厂 正在建设
MMK Atakas公司,伊斯肯德伦,达涅利公司提供设备 240万t板卷钢厂,包括:300t 75 MVA AC电炉、两座LMF炉、两座VD炉、两座薄板坯连铸机、热轧生产线、连续酸洗线、两机架可逆冷轧机、热浸镀锌生产线、彩涂生产线 2010年4季度投产
MMK Atakas公司,伊斯肯德伦,达涅利公司提供设备 热浸镀锌生产线、彩涂生产线 2009年2季度
Diler Demir Celik公司,盖布泽,达涅利公司提供设备 8~50 mm钢筋和16~40 mm棒材生产线,小时产量100t 40万t棒线材生产线,2009年下半年已经投产
Bildco公司,西门子奥钢联工程技术公司提供设备 30万t棒材厂 正在建设
Conares金属供应公司,西门子奥钢联工程技术公司提供设备 50万t棒材厂 2009年已经完工
阿联酋阿布扎比控股总公司(GHC),阿布扎比,酋长钢铁公司,达涅利公司提供设备 一期工程:140万t长材短流程钢厂,包括:直接还原铁厂、电炉钢厂、小方坯连铸机、两座轧钢厂、棒材厂、棒线材厂和辅助设备,Energiron III直接还原铁厂产能180万t;二期工程:Energiron直接还原铁厂产能160万t、第二座140万t钢厂、6流小方坯、大方坯和异型坯连铸机。二期工程完工后,总计长材产能达到300万t。100万t大型型钢厂(最大规格1000mm)将于2011年3季度完工 2007年10月棒材厂和棒线材厂投产,2008年4季度炼钢产能投产,二期工程2010年12月投产
海湾钢公司,西门子奥钢联工程技术公司提供设备 40万棒材厂 2009年1季度已经完工
沙迦钢公司,沙迦自由区,SMS Meer公司提供设备 100万t棒材厂,产品口径10~40 mm,俄罗斯Metalloinvest公司与阿布扎比合资项目 2010年1月份投产
星钢公司,迪拜 24万t中小型钢厂 2010年初投产
海湾海绵铁公司,阿布扎比,Al Nasser工业公司,Tenova HYL提供设备 20万t直接还原铁厂,生产高碳直接还原铁 2010年1季度投产
Mukalla钢铁公司,西门子奥钢联工程技术公司提供设备 30万t棒材型钢厂 正在建设