Middle East steel demand is forecast to grow by 4.9% in 2024 to 56.9 million tonnes on the back of strong economic and projects market growth, according to the World Steel Association.
Speaking at the 17th Arab Steel Summit in Doha on 14 October, Adam Szewczyk, data management head at the World Steel Association, said that the demand growth for finished steel anticipated this year comes on the back of a 4.2% year-on-year rise between 2022 and 2023.
The trend will continue into 2025 where demand is expected to increase by 3.3% to 58.7 million tonnes.
Growth in the region far outpaces other parts of the world, which as a whole is projected to see a decline in demand of 0.9% to 1,751 million tonnes this year and growth of only 1.2% in 2025.
This forecast is attributed to the fall in real estate demand and a sluggish economic performance in China, the largest global market, which continues to impact the market. Higher energy costs and geo-political issues in Europe are also major factors affecting output.
Overall, the Middle East is one of only four regions globally to exhibit demand growth in 2024 alongside India, other developing Asian economies – excluding China – and sub-Saharan Africa.
Specifically, finished steel demand in the GCC is forecast at 6.2% this year to reach 24.2 million tonnes and 4.1% in 2025.
On a country level, Saudi Arabia is exhibiting the strongest growth of the region’s major economies with demand growth of 7% to reach 12.1 million tonnes projected in 2024, rebounding strongly from a fall of 6% in 2023 when the Gaza war, the Red Sea crisis, and weaker global demand deeply impacted the local market’s performance.
It is a similar story in North Africa, which following a decline of 5.3% in 2023, is expected to surge 6.5% to 18.6 million tonnes this year and 5.3% the next on the back in part of a weaker Egyptian pound helping boost exports.
MEED data suggests GCC 2025 steel demand could well exceed current forecasts.
A doubling of annual contract awards to a record $236bn in 2023 is likely to have a major positive impact on steel demand in 2025 and 2026 as this increase in spending flows through into the market over time.
Projects cashflow in the GCC will hit $177bn in 2024 and $250bn in 2025 according to MEED Projects, up from $110bn and $127bn in 2022 and 2023 respectively. Given that the majority of all steel products output in the region is utilised on construction and energy projects, the rapid ramp-up in capital expenditure by extension is likely to result in an equally significant jump in steel demand.