Since last few years, MENA region has been identified as one of the fast growing economies of the world. This growth story started around turn of the century and had a smooth run till 2008 global economic meltdown. Many economies in the developed world suffered a big jolt and since the economies of many countries in MENA region are closely associated with western world, they also felt huge tremors. Infrastructure creation was at the core of this economic growth and due to crunch in liquidity, many infra projectes were halted. The steel demand suddenly dived down and many enterprises associated with this industry witnessed a huge setback, few had to even down their shutters. Many jobs were lost.
All of us know that the collapses are sudden where as the growth is always gradual. The region also started gaining back the lost ground. Slowly the infra projects re started and the steel demand started recovering. Oil price crash happened around 3 years back and it had a similar impact on infra projects and steel demand. Now the oil prices are somewhat better which has improved liquidity situation to some extent. Naturally, the steel industry and the economy in general are on recovery path.
Another factor which has been impacting the economic activity is political instability. The region has been unfortunate on this count and few countries in MENA are going through political instability which is adversely affecting the economy and the industry.
In spite of all these ups and downs, MENA region still offers great opportunities for steel business houses around the globe. It consumes substantial quantity of steel mainly for its infrastructure development needs. Thus steel raw material suppliers have a sustained interest in this region. Further, the region consumes far more than its production capacity and imports the rest. The main suppliers to this region are China, Turkey, CIS countries etc. Till now there was no import barrier to GCC countries but now the governments of few countries are in the process of imposing import duties to protect the domestic industry and to keep the price balance intact. On the other hand, new steel projects are being conceived and implemented to bridge the gap between the consumption and the production.
Overall, I feel that MENA region offers a tremendous opportunity for iron & steel industry and I look forward to a vibrant, growing and sustainable industry in coming time !