Steel manufacturers in the UAE can successfully cater to the growing demand, according to Bharat Bhatia, CEO of Conares, which operates the Gulf region’s second largest steel plant in the private sector.
Currently, about 70% of demand for steel rebar in the UAE market is addressed by the local manufacturers and the rest is covered by imports. The UAE rebar market is estimated to have kept a stable demand of about 3mn tonnes this year.
"The huge growth in the steel industry is a result of other factors as well," said Bhatia. "Construction companies, developers and traders turn to local steel producers due to the reliability of local delivery compared to the imports of debars, which normally takes a minimum of 60 days to arrive in Dubai."
Speaking on the sidelines of Big 5 2014, which concluded on November 20 in Dubai, he said that the steel market in Dubai is currently at a balanced state.
He said the market has evolved strongly since it embarked on a series of developmental projects that has propelled Dubai to be a city of the 21st century.
“Dubai's steel market has enough capacity to support the new wave of infrastructure developments that is planned up to 2020," he said. "The technologies and capacity to cater to this requirement immediately are in place and operating."
“For the steel market in general, the year 2014 started with strong demand than how it is ending now, in comparison with the last year. The demand for steel products in the UAE has increased by 15% in 2014, compared to last year.
"The positive upbeat of the economy in the earlier months of the year, coupled with evidenced liquidity in the market, have reinforced the steel market. We expect the year 2015 would witness more demand compared to the current year.
"The forward indications remain promising as projects continue to be moving on, albeit there have been concerns on further liquidity and Asian economic activities to catch up towards the later part of the year,” he added.
Conares represents 15% of the UAE steel market share.It supplies about 350,000 metric tons of rebar, about 10% of the total domestic requirement in the UAE.
The company also supplies approximately 100,000 metric tons of pipes, which is around 25% of the total market demand in the region
For Mr. Bhatia, the outlook for steel market for the year 2015 looks promising, although the later part of the 2014 has been slightly affected by the depressing global steel prices.
“But project anticipation keeps the mood to be promising, although some concerns on liquidity started to return in the market," he continued.
Steel rebar prices have performed in the normal band of price range for the year. It peaked at $625 from a low of $550 per metric ton (pmt), and is currently hovering at about $575 pmt.
Conares recorded a double-digit growth in the 2014, and recorded an 80% utilisation of its capacity. Sales of Conares steel products increased manifold, and profit of the business also registered significant growth.
“Guaranteeing international quality standards, we are in the position to serve the growing demand. We are focused on maximisation of the capacity of our rebar mill, in order to meet the increasing demand for steel rebar in the region," he said.
"The high-demand and order bookings indicate a 100% utilisation of our installed capacity."
The plants of Conares covers an area of over one-and-a-half-half million square feet. The $150mn-worth Conares, reports $326mn annual revenues.
Source: constructionweekonline.com
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