Middle East and Africa Steel Market Outlook to 2030

Middle East and Africa Steel Market Overview

• The MEA Steel Market is currently valued at USD 13 billion, driven by the continuous growth of the construction and infrastructure sectors across the Middle East and Africa. Major development projects, such as Saudi Arabia's Vision 2030 initiative and the expansion of urban centers in Africa, have significantly bolstered the demand for steel. The automotive and energy industries are also key contributors, utilizing steel in vehicle production, pipelines, and energy transmission projects. The steel demand remains robust due to rising urbanization and the region's focus on sustainable construction materials.
• Dominant countries in the MEA steel market include Saudi Arabia, the UAE, and Egypt. Saudi Arabia's dominance stems from its ambitious infrastructure projects, including Neom and smart city developments, which require vast amounts of steel for construction. The UAE leads in industrial projects, particularly in oil and gas, which utilize specialized steel grades. Egypt is experiencing rapid industrialization and urbanization, leading to a growing demand for steel in housing, energy, and transportation infrastructure.
• Government policies in the MEA region, such as import tariffs and local sourcing regulations, are shaping the steel market. Saudi Arabia, for instance, imposes tariffs on steel imports to protect domestic manufacturers, which strengthens local production capabilities. Meanwhile, the UAE's policies encourage the use of locally sourced steel in infrastructure projects. These policies aim to support the growth of the regional steel industry by reducing dependence on imports and fostering local production.

Middle East and Africa Steel Market Segmentation

• By Product Type: The Market is segmented by product type into Hot Rolled Steel, Cold Rolled Steel, Galvanized Steel, and Stainless Steel. Among these, Hot Rolled Steel holds a dominant market share in 2023. This segment is driven by its extensive use in construction and infrastructure projects due to its versatility and strength, making it ideal for building large structures and transportation networks. Additionally, it is widely utilized in manufacturing heavy machinery and automotive components, further enhancing its demand in the region.

• By Application: The market is also segmented by application into Construction, Automotive, Energy, Machinery, and Consumer Goods. The Construction segment dominates the market in 2023, owing to the region's focus on large-scale urban development and infrastructure modernization. Countries like Saudi Arabia and the UAE are investing heavily in high-rise buildings, transportation networks, and smart cities, driving the demand for steel in this segment. The energy sector, which includes oil and gas, is another key area for steel usage, particularly in pipelines and industrial structures.

Middle East and Africa Steel Market Competitive Landscape

The MEA steel market is highly consolidated, with a few key players dominating the market. Major players in the industry include both regional manufacturers and international giants who have established strong production capacities and supply chains across the Middle East and Africa. These companies are engaged in expanding their production capabilities and adopting new technologies to enhance steel production efficiency. Additionally, the focus on environmental sustainability has led these firms to invest in eco-friendly production processes and the development of green steel technologies.

Middle East and Africa Steel Industry Analysis

Growth Drivers

• Infrastructure Development: The Middle East and Africa (MEA) region is witnessing significant infrastructure growth, driven by large-scale construction and transportation projects. The GCC countries, particularly Saudi Arabia, are focusing on projects like NEOM city, which alone requires substantial amounts of steel for building smart cities and transport networks. By 2024, the Saudi government is expected to spend over $500 billion on infrastructure. In Africa, ongoing projects like Egypts new administrative capital also drive steel demand for roads, bridges, and high-rise buildings. Steel remains crucial for these developments.
• Automotive Industry Growth: The MEA automotive industry is expected to grow due to increasing demand for fuel-efficient vehicles, with steel playing a key role in lightweight construction. For example, automotive manufacturers in South Africa are increasingly utilizing advanced high-strength steel (AHSS) to reduce vehicle weight, thereby improving fuel economy. Saudi Arabias Vision 2030 initiative has also sparked interest in developing a domestic automotive sector, which is expected to increase demand for steel by over 20% for vehicle manufacturing.
• Energy Sector Expansion: Energy expansion across the MEA region, including investments in renewable energy sources, is driving demand for steel. In Saudi Arabia, the energy sector is a key component of Vision 2030, with plans to increase renewable energy capacity by adding more than 58.7 GW, much of which requires steel for wind turbines and power plants. Africa is also expanding its energy infrastructure, with countries like South Africa investing heavily in solar and wind power projects. Steel is vital for the construction of these facilities.

Market Challenges

• Fluctuating Raw Material Costs: Raw material price volatility, particularly in iron ore and coking coal, remains a significant challenge for steel producers in the MEA region. In 2023, global iron ore prices fluctuated between $100 and $130 per ton, leading to uncertainty in steel production costs. This unpredictability affects profit margins for steel manufacturers in the region, especially as many raw materials are imported. Countries like Egypt and Morocco, which rely on steel imports, are particularly vulnerable to these cost fluctuations.
• Stringent Environmental Regulations: Environmental regulations are tightening in the MEA region, especially regarding carbon emissions from steel production. The UAE, for instance, has set ambitious targets to reduce carbon emissions by 23.5% by 2030 as part of its Green Growth Strategy, which directly impacts the steel industry. Compliance with these regulations requires investment in cleaner production technologies, which may increase production costs. Steelmakers are also facing pressure to adopt more environmentally sustainable practices, such as using scrap steel in production.

Middle East and Africa Steel Market Future Outlook

Over the next few years, the MEA steel market is expected to experience moderate growth, driven by several key factors. Governments across the region are continuing to prioritize infrastructure development, especially in areas like transportation, real estate, and energy. In particular, Saudi Arabia's Vision 2030 plan is anticipated to spur a new wave of demand for steel products, as the country focuses on diversifying its economy through the development of non-oil industries. Moreover, advancements in technology, such as the use of automation and IoT in steel production, will lead to increased efficiency and higher output in the coming years.

Future Market Opportunities

• Adoption of High-Strength Steel: The adoption of high-strength steel in both the automotive and construction industries is opening up new opportunities for the MEA steel market. High-strength steel offers superior performance in terms of durability and weight reduction, particularly in vehicles where fuel efficiency is critical. The UAE and Saudi Arabia are leading the adoption of advanced high-strength steel (AHSS), with local industries projected to consume over 1 million tons by 2025 for building materials and automotive components.
• Development of Green Steel: Green steel, produced using hydrogen and renewable energy, is an emerging opportunity in the MEA region. With increasing pressure to reduce carbon emissions, the UAE is piloting green steel projects, using direct reduced iron (DRI) technology powered by hydrogen. This shift to green steel aligns with the regions sustainability goals, and experts expect the production of green steel to gain momentum as carbon regulations tighten. Green steel offers a significant long-term growth opportunity for the MEA steel industry.