Secretary General’s Speech
The steel sector is the second largest sector after petroleum; it is considered as the locomotive of growth to all industries. It contributes to providing thousands of direct and indirect job opportunities. The steel sector is highly affected by internal and external influences. Consequently, it always faces many challenges and confrontations, yet, the Arab iron and steel industry is not excluded from them. Notably with the Coronavirus pandemic, which hit the world in addition to the drop in oil prices in 2020.
The period of the first wave of the Coronavirus pandemic was considered one of the most difficult periods for the steel industry in general, and for the Arab steel industry in particular, pushed many factories to halt production and obliged many workers to leave the premises.
The pandemic has affected the volume of production in most countries of the world in varied proportions, apart from China, which broke the rule: production rose by 5.2% exceeding a billion tonne for its first time. Its parts increased from 53.3% to 56.5% of the world production, being the first country where Coronavirus appeared furthermore the first country to control it.
The Arab countries, like the rest of the world, were affected by the pandemic, in addition to the decline in oil prices, which led to a slump in economic growth for the Arab countries, moving from 2.0% in 2019 to -4.2% in 2020. However, the Gulf region was more affected by a decline of -4.8%, which saw a contraction in demand for the steel products of -10%, to reach 17.2 million tonnes; and a decline in production by -16%, from 17.8 million tonnes in 2019 to 14.9 million tonnes in 2020.
As for North African countries, economic growth declined by -1.7% in 2020 but saw an increase in steel production of 10.8 million tonnes in 2019 to 13.3 million tonnes in 2020 due to keeping the production going, and no release to employees. In addition to finding alternative markets such as exportation towards North American countries, like Tosyali in Algeria; the local markets have suffered from the pandemic (the local demand decreased by – 5% in 2020 to reach 17.2 million versus 18.06 million tonnes in 2019).
The most affected sector in 2020 was the construction sector, but the will of the governments is to reset the pace of the construction and simplify the procedures. It is expected that the demand for steel in 2021 will be an increase of 8% to the Gulf countries to reach 18.3 million tonnes and by 7% to North-African countries to reach 18.4 million tonnes; however, it will remain below pre-pandemic levels.
The Arab Iron and Steel Union hopes that Arab governments will not extend the policy of closure under the pretext of the Coronavirus pandemic, as the repercussions of the economic situation will be hard to support on the social plan. The latest predictions of the European economic growth may restore during the second half of 2021 not as it was scheduled in 2022. Therefore, we should accelerate our reopening pace.
The Arab Iron and Steel Union awaits what Arab countries will do in this field to restore their full economic activity as soon as possible.
Arab Iron & Steel Union