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Emirates Steel Arkan asks UAE to curb cheap Chinese imports

As China's economy slows, demand for steel has dropped, forcing producers to sell internationally Alamy via Reuters
As China's economy slows, demand for steel has dropped, forcing producers to sell internationally
  • ESA liaising with government
  • China has surplus of steel
  • Cheap exports hurting global industry

Emirates Steel Arkan is liaising with the UAE government to explore ways to reduce the impact of China exporting its excess steel at knockdown prices.

A slowdown in China’s property sector has led to a sharp decline in domestic demand for steel, forcing Chinese producers to sell surplus stock cheaply to international markets.

US president Joe Biden in April asked for trade officials in the country to treble tariffs on imported Chinese steel and aluminium products to 22.5 percent.



Meanwhile Europe has implemented the Carbon Border Adjustment Mechanism – essentially a tax that allows countries in the EU to match the carbon price of imports with domestic goods including iron and steel.

“We are closely working with the government here in the UAE to see how we could potentially implement kind of non-trade barriers which will be linked more to this low carbon intensity, more than purely imposing trade barriers,” Emirates Steel Arkan group CEO Saeed Ghumran Al Remeithi said.

Exports from China increased year on year by around a third to 90 million tonnes in 2023. Average prices also dropped by around a third, according to figures from the China Iron and Steel Association.

Emirates Steel Arkan is listed on the Abu Dhabi Securities Exchange and is the largest public steel and building materials business in the UAE. It exports to more than 70 countries around the world.

Yet the company reported a 10 percent drop in revenues over the first half of 2024 to AED4 billion ($1 billion), down from AED4.4 billion recorded for the same period in 2023.

“It’s a tough period for the global steel sector, primarily driven by huge volumes coming out of China,” Al Remeithi said. 

“We have found Chinese material more or less in every single country where we are exporting.”

Al Remeithi said there has been a 66 percent increase in Chinese materials entering the UAE market.

And ArcelorMittal, the second largest steel producer in the world, said this week that exports from China had left the steel market in an “unsustainable position”.

“I don’t think that today the local economy in China is going to rebound in the near future,” Al Remeithi said.

“The only way that we might get away from that situation is if China would decide to basically reduce a bit [of] their output and capacity.”

Despite these challenges, Al Remeithi said ESA is benefiting from a buoyant local market in the UAE, which has increased by 10 percent off the back of huge infrastructure projects. These made up 80 percent of the company’s total business in the past year.

The UAE is the second-largest market for iron and steel in the GCC, accounting for approximately 25 percent of the total market. 

The country’s structural steel fabrication market size is estimated at almost $2 billion and is expected to reach $2.6 billion by 2029, according to Mordor Intelligence.

“I would say our primary market today is UAE, which is one of the strongest economies and markets in terms of consumption,” Al Remeithi said.

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