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09

Industry Study: Iron & Steel Industry

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Opportunities and Challenges

Opportunities

  • The steel sector has some opportunities still exist for the industry:
  • New infrastructure projects implemented by the Public Investment Fund (PIF), and significant developments in infrastructure, economic and industrial projects, and urban projects to modernize facilities and services in the country will boost business opportunities.
  • Launching multiple government initiatives including increasing the home ownership rates, local content programs and products manufactured inside the Kingdom which will raise the demand on the local products
  • Availability of opportunities to export to neighboring countries to benefit from the ongoing initiatives aiming at developing the infrastructure.
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Challenges

  • The steel sector sees multiple challenges that may place some parties (producers and end users) in difficult situations related to competitiveness and profitability. These main challenges can be summarized as follows:
  • Fluctuation of raw material prices: The steel prices are highly fluctuating, as they depend on many factors such as the international price, local and global demand level and the availability of scraps.
  • Lack of main raw materials (steel scraps): the Kingdom and the globe are facing a shortage in steel scrap.
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