The construction boom led by the petro-dollars and the desire to diversify oil-based economies has made the GCC a major business hub for international investors. Steel consumption throughout the GCC has increased significantly underpinned by demand from construction. Liberalization of the real-estate sector and diversion of oil revenue towards construction and infrastructure development has led to a high demand for rebar, a steel bar commonly used in reinforced concrete. An estimated 13 million tpa of rebar is consumed by the GCC countries. According to our estimates 40.0 percent of the total steel demand is met locally while the rest is imported mainly from Turkey, North Africa and CIS countries. The demand for long products, which are mainly used in building and construction, form 60.0 percent of the overall demand. An estimated 10-15 percent of the construction cost is comprised of steel bars cost. GCC steel production is fairly fragmented. There are 18 steel companies in the GCC region engaged in production of raw steel and finished steel products. Saudi Arabia is the largest producer in the region. UAE tops the list with a per-capita consumption of 2,348kgs followed by Qatar 985kgs. GCC as a whole has a per-capita average consumption of 645kgs which is higher than the world average of around 240kgs. With low populations and massive investment in infrastructure and tourism related projects the per-capita consumption in GCC is likely to stay higher than the world average. GCC resides on 500 billion barrels of oil reserves and 1,462tcf of gas reserves accounting for 40.1 percent and 23.3 percent of the world oil and gas reserves respectively. Steel is an energy intensive industry, thus, giving an advantage to producers in the region. The gas is procured at a rate of $0.8-1.5 mmbtu in the GCC compared to $4.0-6.0 mmbtu worldwide. __
