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Saudi Construction and Real Estate Industry Push Iron and Steel Demand
May 07, 2010

With the boom in the real estate and construction sector in the Gulf region, iron production in Saudi Arabia is expected to touch 9.3 Million Tonnes this year.
As reported by the World Steel Association, the iron production in Saudi Arabia is projected to reach 9.3 Million Tonnes in 2010, which was 7.6 Million Tonnes in the previous year. The Kingdom’s iron output is expected to touch 10 Million Tonnes in 2011, as per the new published by gulfnews.
Furthermore, as per the report released by the World Steel Association on April 21, 2010, in Q1 2010, the Kingdom produced 1.3 Million Tonnes of iron and steel, up 70.4% from 938,000 Tonnes produced in the same quarter a year ago.
According to industry experts, the country is emerging as one of the largest steel producers in the Middle East. In 2009, demand for steel slumped down; so with the demand started reaching the normal levels, the sector also started reviving.
In fact, the due credit of the growth in this sector goes to the outstanding boom in the Gulf real estate and construction industry. Earlier, the sector experienced a rapid decline due to global recession. However, as the Saudi market in anticipated witnessing positive growth, if not complete revival, the industry is showing signs of improvement.
Keeping this fact in mind, the manufacturers in the Gulf region have plans to extend their production capacity in a bid to keep pace with this rising demand, mainly in the production of long products like reinforcing steel.
Moreover, as said by the industry experts, steel manufacturers in Saudi Arabia are thinking of increasing their steel production capacity by a minimum of 50%, in coming three years, all set to experience an expected increase in demand from new industrial projects, and also the surge in housing demand after the reinforcement of the mortgage law that was eagerly awaited.
According to a Research Analyst at RNCOS, "Saudi steel production capacities are still below 2007 and 2008 levels as steel manufacturers piled up huge stocks amid declining demand in 2009. However, government investment together with implementation of the mortgage law this year is expected to stimulate the construction sector. This, in turn, will propel steel demand and enable steel producers to return to their normal production capacities.”
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