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According to data from the World LR/DH32 Steel Association, from January to May 2025, crude steel production in the Gulf Cooperation Council (GCC) countries decreased slightly by 0.7% year-on-year to approximately 8.4 million tons, showing a differentiated trend between pressure and recovery in the region as a whole. The significant decrease in Saudi Arabia's production is the main reason for the decline in regional total production, but the positive performance of other countries has played a hedging role to some extent.
As the largest steel LR/DH32 Steel producer in the GCC region, Saudi Arabia's crude steel production decreased by 6.5% in the first five months to 3.9 million tons. The decline is mainly attributed to the weakness of the construction industry, delays in infrastructure projects, and intensified competition for imported steel, resulting in a decline in the utilization rate of local steel mills' production capacity. However, in May, Saudi Arabia's production increased by 5.1% year-on-year, reaching 780000 tons, indicating slight signs of market stabilization.
UAE production increased slightly by 0.3% to 1.6 million tons. Although the performance in the previous months was mediocre, there was a significant year-on-year increase of 21.8% in May, reaching 357000 tons. The UAE's imports of Asian billets increased, which helped local manufacturers control costs and support production to some extent.
Oman's production LR/DH32 Steel from January to May reached 1.3 million tons, a year-on-year increase of 1.6%, but the production in May decreased by 3.8% to 250000 tons.
Qatar continues to lead regional growth, with a production of 639000 tons from January to May, a year-on-year increase of 27.5%; The production in May surged by 46.6% year-on-year to 145000 tons. The increase is due to the restart of Qatar Steel's electric arc furnace (EAF) and the expansion of billet production capacity to fill the regional supply gap.
Bahrain and Kuwait also contributed slightly to the growth, producing 510000 tons (+2.0% YoY) and 468000 tons (+9.3% YoY) respectively.
Despite a slight decline in GCC steel production in the first five months, the overall production in May still increased by 8.4% year-on-year, reaching 1.7 million tons, demonstrating the recovery potential of the regional market in the context of geopolitical uncertainty. If the operating environment in Saudi Arabia and the United Arab Emirates continues to improve, the GCC steel industry is expected to return to a growth track in the second half of 2025. This trend will also have a positive impact on the supply-demand balance of the regional billet and finished product markets.
