The Gulf Co-operation Countries (GCC) will hold a public hearing on imposing safeguard duties on some categories of steel products on 21 July.
GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, had initiated investigations into imports of flat and long products in October 2019 due to sharp rise in import volumes in the 2014-18 period.
The safeguards duty investigation gains urgency in the light of slowing steel demand across the world, including the GCC. Any imposition of additional duty will hit exports by countries such as India. A sharp fall in oil prices over the past few months had a severe impact on Middle-eastern economies, leading to postponement of large construction and energy projects.
Saudi Arabia, the largest economy in the GCC group, had said it will lift import duties on steel products from 5% to up to 20% in early-June, but it is not known whether this decision has been implemented yet.
Major Indian integrated producers mostly export flat products to the Middle Eastern region and additional duties on HRC, a major export item, will be of concern to them. But a safeguard duty on HRC is unlikely, said Dubai-based industry executives.
“I am not sure if GCC will be putting safeguard duties on HRC as Hadeed only will not be able to cater the whole GCC requirements,” said the manager of a UAE-based steel producer.
Hadeed, a subsidiary of Saudi Arabian industrial conglomerate Sabic, is the only HRC producer in the GCC region.
“Saudi Arabia needs 3.5mtpa HRC while Hadeed has a capacity of around 2 mtpa. Besides Hadeed also supplies to other markets in GCC,” said a Dubai-based steel trader.
Additionally, there are specific HRC grades which are in demand in Saudi Arabia but not produced by Hadeed, said the trader. Safeguard duties are more likely on downstream products such as CRC, galvanized and coated products, he added.
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