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| Middle East steel |
Conflict and logistics escalate steel costs in the Gulf
The Middle East steel market faces severe disruption due to escalating conflict and logistics constraints. AGSI reports that even COVID-19 challenges were less severe than current disruptions. As a result, steelmakers in the UAE, Qatar, and Saudi Arabia encounter limited billet supply and rising operational costs.
Shipping through the Strait of Hormuz remains risky, delaying deliveries from China and India. Meanwhile, Jebel Ali port operations have slowed drastically, causing freight rates to surge from $300 to $3,500 per container. Consequently, alternative ports like Sohar and Fujairah struggle to handle large volumes efficiently.
Steel prices, particularly rebar, have increased significantly due to supply limitations. Emirates Steel rolled over official April offers, while other producers raised prices by 200–215 dirhams per tonne. Therefore, mills may operate at 50% capacity in April and May if logistics issues persist, impacting the Gulf steel market.
ScrapInsight Commentary
The Middle East steel disruption highlights vulnerability in regional scrap and billet supply chains. Consequently, recycling operators and importers face cost pressures, while circular economy integration remains challenging. Long-term, diversified sourcing and port infrastructure upgrades will be critical to stabilizing the market.
