Supply and demand in Saudi Arabia's domestic steel market are likely to achieve a balance next year, potentially allowing greater scope for imports and exports, an executive at Al Rajhi Steel Industries said. The extra capacity for steel production across the Kingdom - along with a gradual end to new, very large construction projects - could see the market normalize and open up to the region, according to Faisal Bin Edan, marketing director at the Saudi steelmaker. "At the moment, so much of the steel demand is within Saudi Arabia, so there are still restrictions on the flow of steel in and out of the country," Bin Edan said on the sidelines of the Metal conference in Cairo. According to RNCOS "Saudi Arabia Steel Industry Forecast to 2013", the steel consumption in Saudi Arabia has grown rapidly in the past few years on back of rising construction activities, growing investment in railways, and cheap and reliable energy supply. In the next five years, the Kingdom is expected to sustain its leadership in construction activities in the entire Middle East. "The Kingdom of Saudi Arabia has become one of the favorite destinations for the steel majors due to thriving construction sector, and soaring steel demand. The construction sector in the country is considered as the largest and the fastest growing market in the Gulf region, with a huge growth potential. As the appetite for steel is growing in the Kingdom, its production will also grow at a CAGR of around 9 percent during 2012-15, the report said. The Kingdom showed its resilience to the downturn in the construction industry, which affected all Gulf Cooperation Council (GCC) countries. With multi-billion dollar projects underway in both public and private sectors, the KIngdom has gained a significant share in the total GCC construction spending. Also, its economy is being propelled onto a whole new level with the building of four integrated economic cities. The report estimated that steel consumption in Kingdom has reached around 12.1 million metric tons in 2011. Due to such a strong demand and soaring domestic steel prices, the share of imported steel is expected to witness an upward trend in the coming years, it added. According to Steel Business Briefing, demand for medium and heavy sections in the Middle East is forecast to reach 4.3 million tons in 2012, with Saudi Arabia and the UAE being the biggest consumers.
