WSD’s Regional Outlook & Development: MENA
MENA – Steady as they come
Despite the ups and downs of global oil prices, geopolitical tensions and unraveling of governments, the MENA region has managed to post consistent and solid growth looking back over the last decade:
- Steel demand has risen from roughly 71 million tonnes in 2015 to 80 million tonnes in 2019 and an estimated 93 million tonnes in 2025. The overall growth rate over this period has been about 2.8% on average, well above the 0.15% average ex-China/India during the same period.
- WSD forecasts steel demand will continue to increase at a slighter reduced pace of 2.2% in the decade ahead impacted by a combination of: a) lower oil prices leading to budgetary pressures in heavily oil-dependent economies – the recent pullback in highly ambitious projects in Saudi Arabia is a prime example; b) continued incursion of indirect steel-containing imports of Chinese goods; and c) the risks of further geopolitical turmoil, especially in Iran.
- Overall, the region remains among the fastest-growing globally, with apparent demand forecast to reach 115 million tonnes by 2035 and about 128 million tonnes by 2040.
- Crude steel output has largely kept pace with demand growth, rising from about 37 million tonnes in 2015 and 57 million in 2019 to 73 million in 2025 for an average growth rate of 6.7% over the ten-year span.
- The MENA region has been the hotbed of investment in DRI-based EAF technology throughout the period leveraging the region’s availability of low-cost natural gas, with DRI/EAF production increasing from 31 million tonnes in 2015 to 57 million tonnes in 2025.
- WSD forecasts this trend to continue. We expect crude steel output to increase another 19 million tonnes by 2035 to 92 million tonnes, with the DRI/EAF portion accounting for all but 3 million tonnes of the increase.
- Despite the relative “success” story for this region with respect to demand and production growth, things could’ve perhaps been even better had MENA not absorbed a significant blow from the impact of China’s “Export Armada:”
- Net imports had fallen from about 34.5 million tonnes in 2015 and 24.7 million tonnes in 2019, just preceding Covid, to a three-year average of only 8.4 million tonnes during 2021-2023 (with a low of only 1.9 million in 2023). However, net imports have surged since then to 22.3 million in 2024 and an estimated 23.4 million in 2025.
- WSD largely expects the import pressure to remain at or near current levels given the situation in China and our forecasts for its future exports of steel products, with MENA net imports forecast at about 28 million tonnes in 2035.
Hence, the aforementioned steel production forecast – reflecting an increase of about 19 million tonnes in the next decade – is in effect held back by the continued onslaught of Chinese steel exports to the region.