Monday, 10 October 2016

Emirates Steel Targets Oil Industry for Growth as Building Peaks

In Oil & Companies News 10/10/2016

Emirates Steel Industries, which accounts for almost half of the metal’s production in the United Arab Emirates, is looking to boost sales to the oil and gas industries because of a slowdown in the local construction business.
While building accounts for about 90 percent of the Gulf nation’s steel demand, per capita steel consumption has fallen to about 800 kilograms (1,764 pounds) from about 1,400 kilograms in 2010, Emirates Steel Chief Executive Officer Saeed Ghumran Al Remeithi said Monday in an interview in Dubai. The company is also targeting an expansion into manufactured products.
“As we move forward, we must develop demand for steel by other sectors to balance the maturing demand from the construction sector,” he said. “I don’t see a big shrinkage in demand in the U.A.E. In the short term, I hope it will be a small growth.”
Emirates Steel will produce about 3 million metric tons this year out of total U.A.E. output of about 7.2 million to 7.5 million tons, Al Remeithi said. Production capacity is 3.5 million tons, he said.
The company is importing iron ore, a raw material used to make steel, from Vale SA in Brazil, along with processed iron-ore products from Sweden and Oman, he said. Ore prices have risen in 2016, snapping three years of declines, after China took steps to stimulate its economy to counter a slowdown. Prices won’t change much by the end of the year, Al Rameithi said.
Since his appointment as CEO in July 2011, Al Rameithi has also expanded sales outside the U.A.E. Emirates Steel sells about 40 percent of its production in international markets including the Gulf region, Europe, Asia and the U.S., he said.

Source: Bloomberg