Todays News

Secretary General – Arab Iron and Steel Union : A brief look at the iron and steel industry

A brief look at the iron and steel industry in the Arab countries

 before and after the pandemic


By Dr Kamel Djoudi

Secretary General – Arab Iron and Steel Union


In 2020, the world was affected by the Coronavirus (Covid-19) pandemic, including the Arab countries, which suffered more with the collapse of oil prices, therefore a decline in their financial resources and economic contraction of 4.2%.


To confront this pandemic, the Arab countries needed to set priorities to carry all the measures to support the health sector from collapsing and support the social coherence to limit the pandemic repercussions on society. And to postpone all major activities and projects at a later time, which led the industry sector to incur great losses, foremost the iron and steel industry, which many other industries depend on, such as construction, architecture and others.


The first stage: 2020 with the beginning of the spread of the virus


Since the pandemic outbreak, the steel sector saw major obstacles that led to a severe slowdown in the production flow due to the suspension of most major projects and nearly a total suspension of trade exchange, consequently on the sea, air, and land transportation. In the Arab countries, crude steel production decreased by -2% to reach 28 million tonnes in 2020 compared to 2019 and -8% for the production of finished products (Longs – flats) and -9% for steel consumption to reach 38 million tonnes in 2020.


For the Arab countries, 2020 passed differently and was relatively severe for the Gulf Cooperation Council countries (GCC), as a great number of fundamental projects were postponed from March 2020. In addition to a large number of foreign workers were laid off to limit the virus spread, which has negatively affected the crude steel production by -16%, and -13% for the final steel products, and on-demand too, consequently on steel consumption by -10% compared to 2019.


Concerning the North African countries, they were able to increase their crude steel production by 21% compared to 2019 to reach 13.1 million tonnes led by Egypt and Algeria due to the increase in production capacities. In addition to finding new alternative markets for steel products export (Algeria), and relying on semi-finished products “billets”, which is produced locally in Egypt, after imposing protective duties on billet imports in 2019 ending in 2022.


As for the Eastern Mediterranean region, which includes Syria, Iraq, Jordan, Yemen, and Lebanon, it is characterized by the lack of clear vision due to the instability, which faces many challenges at various levels, such as restoring security and ending military and political conflicts in the region. All these factors have greatly affected the economic situation and various industries including steel products demand, which has declined by -14% compared to 2019.


The second stage 2021:


The World Steel Organization expects demand to recover in 2021 to reach 1,795 million tonnes, an increase of 4.1% after countries began to ease precautionary measures and gradually return to economic activity.


The Arab countries’ economy is also expected to recover, especially in North Africa, which recorded improvement by continuing to increase crude steel production led by Egypt, bringing the region’s production to 15.4 million tonnes, with an increase of 17% compared to 2020.


It is also expected that the GCC region will witness an improvement in crude steel production of 7% with the reactivation of postponed projects, the recovery of oil prices, and the improvement of the health situation in the region such as (UAE – Saudi Arabia), and an increase in demand for steel products to reach 18.5 million tonnes in 2021.


As for the Eastern Mediterranean, it is subject to political solutions and decisions that will be taken at the level of the governments and international organizations to find appropriate solutions and get out as soon as possible from this multifaceted crisis.


In the end, due to the recent developments of the Covid-19 virus, especially with the discovery of the new Delta mutant, some countries have begun to retreat from some mitigated decisions they had taken before, which will inevitably affect their economic growth during the second half of this year. Moreover, accelerate the process of mass vaccination of the population against the Coronavirus and return quickly to the state before 2020.



*Source: Economic Committee – Arab Iron and Steel Union (June 2021)