Saudi Arabia’s Welded Steel Pipe Market Outlook Report

Product Description

With a GDP of over $793 billion in 2019, Saudi Arabia was the largest economy in the region that year. The country’s economy, the second richest country in terms of natural resources, is heavily dependent on oil, its main natural resource. But since the introduction of the 2030 Vision in 2016, the country has determined to minimize oil reliance. Saudi Arabia is the third largest producer of crude steel in the region, behind Turkey and Iran. Owing to the abundant availability of natural gas, steelmakers use direct reduction in EFs to produce steel. However, with the increasing volume of ferrous scrap in the Arab states of the Persian Gulf, the share of scrap in the country’s steelmaking feed has increased.

Market drivers of Saudi Arabia’s welded steel pipes

Based on the Saudi Vision 2030 and the country’s plans to expand the share of manufacturing in the total GDP, the per-capita consumption of steel is expected to increase along with industrial development. This will boost steel demand. It should be mentioned that the manufacturing sector’s contribution to the total GPD has increased from 11% to 13% over the past years.

The Gulf Railway, aimed at connecting all six Gulf Cooperation Council-member states in the Persian Gulf, will be 2,177 kilometers long. Moreover, Saudi Arabia is also implementing another railway project; although there have been delays in the project due to financing issues, it is still one of the important goals defined in the Saudi Vision 2030. While these factors do not directly give a significant boost to steel demand from railway development, they are still strong drivers for the manufacturing of railroad cars, which can boost steel consumption in the country. The consumption of welded steel pipes in the oil and gas industry is one of the most important applications of these products; the mechanical properties of welded steel pipe have resulted in considerable demand.

Saudi Arabia reported the first case of Covid-19 in early March 2020. Lockdown measures were then implemented, leading to a 70% drop in the country’s mobility index. As the pandemic continued to spread across the country, more strict measures were taken, putting further pressure on the mobility index. The country is now past the first wave of Covid-19, but many are still forecasting worse to come in the coming months.

Overview of Saudi Arabia’s welded steel pipe market

Over the past years, significant capacity for welded steel pipes has been developed in Saudi Arabia. The country has both imported and exported welded steel pipes over the past years; the UAE has been the major destination of Saudi welded steel pipes. Given the demand outlook for crude steel as well as steel products and considering the fact that the country’s steelmaking capacity is not being fully utilized, the market balance for steel products is expected to remain in equilibrium, but gradually move back to supply deficit afterwards.

Breakdown of Saudi Arabia’s welded steel pipe market

Domestic demand for welded steel pipes in the forecast timeframe as well as the previous period has been broken down using three factors. The first factor breaks down the market into three categories: carbon steel, alloy steel, and stainless steel. Past and future trends for each type of material have been analyzed. Carbon steel welded pipes hold the largest share of the market. In the second breakdown, products are distinguished based on diameter: greater than 16 inches and smaller than 16 inches; welded steel pipes with diameters smaller than 16 inches hold the largest market share. Finally, using the third factor, welded steel pipes are categorized based on their applications in different industries. Infrastructure is the largest consumer of welded steel pipes in Saudi Arabia.

Key players in Saudi Arabia’s welded steel pipe market

• Al-Jazera Factories
• ARABIAN PIPES COMPANY
• National Pipe Company Ltd. (NPC)
• Amiantit
• International Tube and Conduit Company (ITCC)
• AMERON SAUDI ARABIA LTD
• Gieminox
• Armetal Stainless Pipe “ASP”
• SAUDI STEEL PROFILE MANUFACTURING FACTORY COMPANY
• AL MUSAIRIEY METALLIC INDUSTRIES CO
• JUBAIL ENERGY SERVICES COMPANY
• SAUDI ARABIAN DUCTILE IRONN PIPES COMPANY LIMITED