2019 The challenges’s Year of Arab Iron and Steel Industry
We left behind the year 2018 and its global disputes and conflicts on steel markets in various regions of the world , Despite the conflicts and challenges faced by the global steel industry, the Arab steel industry was stable due to the durability of major companies , Which is the basis of the iron and steel industry in any country and which worked hard without trouble despite losses or decline in profits.
The huge investments made by Arab governments in the fields of construction and reconstruction projects, infrastructure projects, road projects, tunnels, railways and new metro projects have played an important role in the sustainability of these companies’ productivity.
But by the beginning of 2019 iron ore prices had peaked at $ 90 per ton, affected by the collapse of the collapsed dam in Brazil, which affected the production of Vale, the world’s largest iron ore producer, and lost about 70 million tons of iron ore, which had a negative impact on the final product cost of companies In the Arab countries due to the rise in world iron ore prices. It is expected that it will not depend on the loss of this amount of production, but could extend to 9% of its production if the Brazilian government decides to close more of the Vale mines.
One of the most important challenges is that the Arab steel companies have faced a inequality in prices between the local product and the imported product, Dumping has become one of the most important issues of interest to the Arab steel industry under the imposition of protection tariffs on steel products in most countries of the world and the weakness or non-imposition of protection tariffs by the Arab countries as they should be ,_ We find that the markets in the Arab region have become one of the solutions for steel exporting countries.
Exporting countries to the Arab region have changed their export policy from the export of final products imposed by some tariffs , although sometimes unfair fees to export semi-final products exempt from tariffs , Small mills are exhausted from them, which only work in the field of formation and operation, and create an unequal market with integrated national companies that carry out all stages of steel production.
Nevertheless, there are positive signs, Emirates Steel announced a 44% increase in profits before interest, tax, depreciation and amortization to AED 1 billion, compared to AED 678 million in 2017. Ezz Dekheila Steel also reported a 13.6% increase in profits and a profit of 2.5 billion Egy in 2018 compared to profits of 2.2 billion Egy in 2017.
Increasing the sense of a better future for the steel industry,_ Taking into account the uncertainty as the experience of the past years proved that the global economic changes have a direct impact on the steel industry in general and the Arab steel industry in particular.
Increasing the sense of a better future for the steel industry,Taking into account the uncertainty as the experience of the past years proved that the global economic changes have a direct impact on the steel industry in general and the Arab steel industry in particular.
Economic indicators suggest that the Middle East and North Africa (MENA) economic growth rate will rise from 2.0% in 2018 to 2.5% in 2019, but China’s economic growth rate, the world’s largest steel producer, will fall from 6.6% in 2018 to 6.4% in 2019.
Which will be reflected in the volume of investments that will be made in the construction and reconstruction projects and infrastructure. These projects are the largest consumer of Chinese steel products, and with the decline of the index of steel consumption in China makes Chinese steel companies are going to export.
The Arab Iron and Steel Union hopes that the year 2019 will be promising and full of activity for the Arab steel companies to raise the steel industry in the Arab world.