Chinese Steel Companies Flock to the Middle East

The Middle East, once labeled as an "oil tycoon", is reshaping the global steel trade landscape with trillion-level infrastructure investment. At the beginning of the 21st century, the trade surplus of oil-producing countries in the Middle East, such as Saudi Arabia and Qatar, increased significantly, stimulating domestic demand for infrastructure construction, and steel imports increased significantly. In 2006, the per capita steel consumption in the Gulf region was 378 kilograms, far exceeding the world average of 182 kilograms at the time, thus becoming one of the world's largest steel consumption markets at the time.

In recent years, many countries in the Middle East have accelerated the promotion of infrastructure projects. The eight smart cities Neom in Saudi Arabia's "Vision 2030" plan require 12,000 kilometers of railways to be laid, and real estate development and transportation energy projects are being launched intensively. Rebar and other building materials continue to be in short supply; Iraq's post-war reconstruction has launched large-scale projects such as roads and ports, and steel demand has shown explosive growth; Egypt has built a new administrative capital and several new cities, further promoting the growth of steel consumption; the aftermath of the construction of the Qatar World Cup stadium group is still stimulating new steel structure demand...

In 2024, the Middle East's steel consumption will be 57.9 million tons, and in 2025, the demand for steel may reach 59.5 million tons, a year-on-year increase of 2.8%.

Faced with the huge potential of the Middle East steel market, Chinese companies such as Baosteel Co., Ltd., Qingshan Jinnan Steel, and Xinfeng Steel have rushed to layout and deeply participated in the construction of the Middle East steel industry by building production bases and supporting industrial parks.

Saudi Arabia: Baosteel and Aramco cooperate to invest in green steel

In July 2024, Baosteel Co., Ltd. officially decided to invest in a thick plate steel plant project in Saudi Arabia to promote the company's first overseas full-process steel greenfield project. The total investment of the project is US$4.543 billion.

Baosteel will jointly invest with Saudi Aramco and the Saudi government's sovereign fund, the Public Investment Fund (PIF), with a shareholding ratio of 50:25:25.

The project plans to produce 2.5 million tons of direct reduced iron, 1.667 million tons of steel and 1.5 million tons of thick plates annually, mainly targeting the oil, gas, shipbuilding, marine engineering and construction industries in the Middle East and North Africa.

The project will use natural gas direct reduction iron furnaces and electric arc furnaces, aiming to reduce carbon dioxide emissions by more than 60% compared with traditional blast furnaces, which can be called low-carbon "green steel".

Egypt: Xinfeng accelerates investment to build an industrial complex

In March 2025, Xinfeng Steel (Egypt) Co., Ltd. signed a cooperation agreement with the Suez Canal Economic Zone Authority (SCZone) to build a large industrial production complex in the Ain Sokhna Complex in Egypt. The project covers an area of ​​3.75 million square meters and the investment amount is US$1.65 billion.

The project will be carried out in two phases and is expected to be completed and put into production within five years. The first phase is scheduled to start operations in early 2027 and includes the construction of factories for the production of automotive parts (230,000 tons per year), metal parts for household appliances (50,000 tons per year), standard fasteners (100,000 tons per year), and a hot-rolled steel coil plant with an annual production capacity of 2 million tons. The second phase will build five new factories and two service centers for research and development and solid waste recycling.

The five factories will produce mechanical parts (200,000 tons per year), brake discs (150,000 tons per year), steel structures (100,000 tons per year), aluminum-magnesium alloy automotive parts (20,000 tons per year) and cold-rolled steel coils (2 million tons per year).

The project will focus on high value-added industries such as automobiles, construction machinery and household appliances, and is expected to stimulate Egypt's export growth.

Iraq: Tsingshan Holdings has been approved to build a steel industrial city in Iraq

According to foreign media reports, the Iraqi Ministry of Industry and China's Shangxin Company signed two important investment cooperation agreements to promote the development of the country's industrial sector. It is reported that the actual signing party is Tsingshan Holdings Group, a well-known steel and mineral investment and development company.

The first cooperation agreement: plans to build a steel plant in Basra, mainly producing sponge iron and other products, with an estimated annual production capacity of 1 million tons. The project is located near the port of Hor Zubair in Basra Province in southern Iraq, adjacent to the Iraqi Basra State-owned Steel Plant.

The second cooperation agreement: The main content is to cooperate in the construction of a multifunctional industrial city and heavy industrial base in Basra Province. The industrial city project is expected to invest more than US$2 billion.

As a Chinese private steel company, Tsingshan Holdings has rich overseas investment experience and has great advantages. Once the project is officially launched, it will be China's second large-scale steel project in the Middle East after Baosteel jointly invested in a green and low-carbon full-process thick plate plant in Saudi Arabia with Saudi Aramco and the Public Investment Fund (PIF).

Oman: Jinnan Iron and Steel joins hands with Vale to build a mineral processing base

In October 2024, Jinnan Iron and Steel Group and Vale, a leading global iron ore producer, announced a partnership to build an iron ore beneficiation plant in Sohar Port and Free Zone, Oman. The initial investment in the project exceeded US$600 million.

Among them, Vale will invest $227 million to connect the concentrator to its local agglomeration facilities, while Jinnan Iron and Steel will invest about $400 million in the construction and operation of the concentrator.

The concentrator is scheduled to be put into operation in mid-2027 and will process 18 million tons of low-grade iron ore and produce 12.6 million tons of high-grade concentrate annually.

The plant will provide high-quality iron ore for local pellet and briquette production, which is essential for the production of low-carbon steel products through the direct reduction route.

Others

In addition to the above-mentioned key projects, there are other Chinese steel companies investing in the Middle East and North Africa region. Bunyan, a subsidiary of Rongsheng Group, plans to open a steel plant with an annual production capacity of 500,000 tons south of Riyadh to produce energy-saving rebar and wire rod.

This marks a shift in the business of Chinese companies in Saudi Arabia from mainly undertaking construction contracts to building local production capacity.

Tianjin Tianda Investment Holding Group also cooperates with Delong Steel Group's New Tianjin Steel to plan to build an electric arc furnace steel plant with an annual output of 10 million tons in Saudi Arabia.

In addition, Shenqing Company had considered investing $2 billion in Egypt's Suez Canal Economic Zone to produce cast iron pipes and steel, a project planned to be implemented in two phases with a focus on exports.

These Chinese investments are expected to have a profound impact on the local steel industry in the target countries.

The influx of Chinese capital and technology will promote the modernization of the steel industry in the MENA region, making it more competitive and environmentally conscious.