The long steel products industry is a vital sector for both local development and regional trade, by significantly focusing on steel rebar, wire rods and steel sections (called long products). This industry plays a major role in infrastructure and construction works that are necessary for economic growth in Saudi Arabia. Approximately 89% of the long steel products are allocated for steel rebar and wire rods needed for construction, while 11% are allocated for steel sections. The sector is experiencing a significant growth due to the increase in the construction and infrastructure activities, which can be manifested by achieving CAGR of 8% for steel rebar and 4% for wire rods during the period from 2018 to 2022. Globally, the long products market is expected to progressively grow to reach CAGR of 4.5%.
On the regional level, the iron and steel market in the Middle East is recovering and expanding due to the high government expenditures and economic diversification efforts. Despite the Covid-19 pandemic consequences, the iron and steel market in the Kingdom is expected to achieve a growth rate of 4% as a result of the technological advancement and the high local production capabilities. Leading companies in the region are working to promote their competitiveness through strategic innovations and expansions. Meanwhile, the sector faces
challenges such as fluctuation and lack of raw materials, especially steel scrap of prices, which can affect the production costs and profits. In addition, there are opportunities for growth in light of the new infrastructure projects implemented by the Public Investments Fund (PIF) and governmental initiatives aiming at increasing the local content and home ownership.
Export increase to neighboring countries that highly invest in infrastructure, represents a promising opportunity for growth. In order to achieve growth, the stakeholders must focus on the products quality, effectively cover the market, achieve backward integration, manage costs, overcome these challenges and benefit from growth opportunities.