Mohammed Salem Al Afari, Vice President of Marketing at Emirates Steel spoke to Pipeline Magazine about how developments in the steel sector are affecting the oil and gas market
Tell us a little about the trends you are noticing in the steel industry and how this is affecting the oil and gas sector?
I think the main trend in the steel industry is related to the development of new steel grades to serve the oil and gas sector by providing higher strength steels that are more resistant to climate and operational conditions, giving better life expectancy and thus reducing costs. In addition, we are witnessing increased competition globally which means the oil and gas sector has more supplier options to choose from to secure supply and obtain reliable support services.
What projects are you involved in here in the Middle East?
Emirates Steel has become a supplier of choice for many fabrication companies serving the oil and gas sector in the region. Our products are delivered to them on regular basis and ultimately serve this vital sector in the GCC and beyond. This has come as a result of our quality assurance systems and securing the necessary quality and approval certiﬁ cations from major oil companies in the region. At present for example, in KSA we are involved in the Fadhili gas project, with Saudi Aramco and also with a major oil project. in Kuwait. We are confident that the utilisation of ES products in major oil and gas projects in the region will continue to flourish based on the strong foundation and business partnership we have formed with the main players in this vital sector.
What predictions do you have for the steel sector in the coming 18 months?
The global steel sector will continue to be pressurised by global overcapacity. However, it is a fact that many countries are coming to terms with this situation by adopting speciﬁ c measures to address their concerns. In the MENA region, steel imports will continue to grow over the coming 2 years driven by growing local demand and the availability of cheap steel imports in the face of a fragmented local steel industry with limited competitiveness. In the GCC in particular, demand will continue over the coming period at the same levels although we mainly use rebar [reinforcing bar steel]. Construction is the main driver of rebar consumption.
Some slowdown in certain areas, may require rebar producers to seek alternative markets. I mean, we are not going to see a big growth in demand over the coming two years, but at least things will stabilise until the beginning of 2018, at which point we might see renewed increase in demand, which will be driven by Expo 2020 here in Dubai and FIFA 2022 World Cup in Qatar, among other growth factors. Of course, when oil prices go back to their normal levels and stability is restored in certain areas, then we will see an increase in demand sooner, especially in KSA.
Which new markets are you looking to break into?
Well, at Emirates Steel we produce different products. We produce rebar, heavy sections, sheet piles and wire rods. So, we have a range of different products. These products are sold around the world. We currently sell wire rods to countries in Asia, such as Singapore and Thailand. The heavy sections we export to more than 28 countries around the world. Our finished steel products are sold in a wide geographic span, from America to Australia. We also continue to open new markets for our heavy sections, and are making significant progress on that front.”
What will Emirates Steel be looking forward to at ADIPEC 2016?
We participated last year and will be doing so again this year. We are always keen to attend events like ADIPEC where we can meet with our clients and gain an understanding of what other projects are upcoming. ADIPEC is an event that we would never miss – it provides a valuable insight into the global oil and gas sector.