Reconstruction in the Middle East is indeed driving up the demand for steel.
Date:2026-07-06
1. Current Demand Landscape: A Mix of Short-Term Gaps and Long-Term Essential Needs
Supply-side contraction accelerates demand spillover: Due to the geopolitical situation, Iran—a major global steel billet exporter—has seen its domestic steel mill capacity impaired (with an estimated supply impact of approximately 10 million tons) and has implemented restrictions on steel exports. This has prompted traditional buyers like Pakistan and the UAE to urgently shift their procurement to countries such as China, directly fueling the growth of Chinese steel billet and rebar exports in the first quarter.
Reconstruction plans underpin long-term demand: This is not merely a short-term phenomenon. Iranian officials have signaled the start of reconstruction; the scale of war-related damage is estimated at up to $270 billion, with initial startup funds of $40–50 billion currently being secured. Meanwhile, "mega-projects" under Saudi Arabia's "Vision 2030" continue to generate demand; residential construction alone could drive an additional 14 million tons of steel demand annually.
2. Characteristics of Steel Demand: Product and Market Differentiation
Regarding specific product categories, the initial phase of reconstruction creates the most direct and inelastic demand for construction steel (such as rebar and structural sections). Furthermore, as local Middle Eastern production capacity focuses primarily on standard long products, there is a stable, long-term reliance on imports for high-end hot-rolled sheets and specialty industrial steels, resulting in a consistent demand gap for these premium products.
Regarding market participants, Chinese enterprises are actively positioning themselves. For instance, Sinosteel Engineering & Technology Co., Ltd. (Sinosteel International) has recently secured contracts for projects such as a short-process steel plant in Egypt, a direct reduced iron (DRI) facility in Oman, and a seamless steel pipe project in Saudi Arabia, demonstrating the synergistic advantages of combining engineering services with equipment exports.
