ArcelorMittal Jubail aims to increase production in 2019
ArcelorMittal Jubail, one of the two seamless pipe producers in Saudi Arabia, plans to increase production this year, owing to the support from the project market and stronger fundamentals in the oil and gas industry.
The mill with a production potential of 600,000 tpy aims to reach 80% capacity utilization in 2019, while last year it ran at around 60%, according to Mauro Longobardo, CEO of ArcelorMittal Jubail. The company relies on generally sizeable demand for seamless pipe in Saudi Arabia and the GCC amid high oil and gas production and transportation.
Moreover, ArcelorMittal Jubail plans to benefit from closer ties with Saudi Aramco, its traditional partner, as several projects are led by the oil giant in the areas of exploration, production, transportation and refinery, Metal Expert learnt. “Aramco consumes more than half a million tonnes of pipes yearly and aims to consume more… Currently, we supply them with 40% of what we produce. Our strategy is to offer half of our capacity to Aramco but also develop an export market to eventually enlarge our customer base,” the source added.
Despite bold targets, competition with imports, first of all from China, remains the key challenge for the domestic pipe industry. “The utilization rate is much lower than capacity due to imports,” Abdulaziz Al Doussari, steel pipes and tubes unit director at Saudi National Committee for Steel Industry, said during an industrial event. In addition, the local pipe producers failed to restrict seamless pipe imports from China under the antidumping investigation finalized in November 2018, as Metal Expert reported earlier. “The cost here is pretty high compared to the cost for Chinese mills. The imported material used to produce our pipes in many cases is more expensive than a finished pipe coming from China, so we cannot compete,” Mauro Longobardo mentioned.