Chinese steel enterprises are accelerating their investment and layout in the Middle East region
Related research reports show that the scale of Middle East trade is expected to exceed $1.8 trillion in 2025, of which the proportion of non-oil trade will jump from 48% in 2023 to 55%. Emerging fields such as cross-border e-commerce, new energy equipment, and medical technology are growing at an average annual rate of over 25%.
Against the backdrop of the Middle East accelerating its economic diversification process, the demand for steel in the Middle East continues to rise. The "infrastructure construction boom" has created a huge market for steel demand. Projects such as urban rail transit and commercial complexes are being continuously promoted, and the demand for medium- and high-end steel products is growing. At the same time, the development of strategic industrial fields such as oil and gas, shipbuilding, and marine engineering also puts forward higher requirements for special steel products.
A set of data also illustrates this point: In 2024, the steel consumption in the Middle East was 57.9 million tons, and the steel demand in 2025 is expected to reach 59.5 million tons, a year-on-year increase of 2.8%.
However, compared with the rising demand for steel, the steel production capacity in the Middle East appears insufficient, and there are structural contradictions in the steel supply system.
Data shows that the local crude steel production capacity accounts for less than 3% of the global total, and more than two-thirds of the steel products rely on imports from outside the region, especially there is a large supply gap for high-end plates.
The huge gap between production capacity and demand makes the Middle East a blue ocean market that global steel enterprises are vying for.
Faced with the huge potential of the Middle East steel market, Chinese enterprises such as Baosteel Corporation, Shanxi Nangang Iron and Steel Co., Ltd., and Xinfeng Iron and Steel Co., Ltd. have invested and laid out in succession. By building production bases and supporting industrial parks, they are deeply involved in the construction of the Middle East steel industry.
On May 1, 2023, Baosteel Corporation, a subsidiary of Baowu Group, in conjunction with Saudi Aramco and the Public Investment Fund (PIF) of Saudi Arabia, will build the world's first green and low-carbon full-process thick plate factory in Saudi Arabia. According to the agreement, the three parties will jointly invest to establish a joint venture company, with Baosteel Corporation holding 50% of the shares, and Saudi Aramco and PIF holding 25% each.
After the establishment of the joint venture company, a full-process steel manufacturing base with an annual designed production capacity of 2.5 million tons of direct reduced iron and 1.5 million tons of thick plates will be built.
It is worth noting that PIF, the joint venture partner of Baosteel Corporation, is the sovereign wealth fund of Saudi Arabia and also the world's largest sovereign wealth investment fund. The other party, Saudi Aramco, is one of the world's largest oil producers and refining enterprises and also an important crude oil supplier to China and a strategic customer of Baosteel Corporation.
This project aims to serve multiple industries such as oil, natural gas, shipbuilding, and construction, and is committed to the research and application of low-carbon processes, striving to reduce carbon emissions by more than 60%.
According to media reports, the Iraqi Ministry of Industry signed two important investment cooperation agreements with China's Shangxin Company to promote the development of the industrial sector in the country. The actual signatories are said to be Tsingshan Holding Group, a well-known iron and steel and mineral investment and development enterprise.
The first cooperation agreement: It is planned to build an iron and steel plant in Basra, mainly producing products such as sponge iron, with an annual production capacity of expected to reach 1 million tons. The project is located near the Port of Khawr az Zubayr in Basra Province in southern Iraq, adjacent to the state-owned iron and steel plant in Basra.
The second cooperation agreement: The main content is to cooperate in investing in the construction of a multi-functional industrial city and a heavy industry base in Basra Province. The investment scale of the industrial city project is expected to exceed $2 billion.
As a private iron and steel enterprise in China, Tsingshan Holding Group has rich experience in overseas investment and has significant advantages. Once the project is officially launched, it will be the second large-scale iron and steel project of China in the Middle East after Baosteel's joint investment with Saudi Aramco and the Public Investment Fund (PIF) to establish a green and low-carbon full-process thick plate factory in Saudi Arabia.
On October 28, 2024, Shanxi Nangang Iron and Steel Group and Vale, the world's leading iron ore producer, announced a partnership and will establish an iron ore beneficiation plant at the Port of Sohar and the Freezone in Oman. It is reported that the Sohar beneficiation plant is planned to be put into operation in mid-2027, processing 18 million tons of iron ore per year and producing 12.6 million tons of high-grade concentrate.
For Shanxi Nangang Iron and Steel, this is its first project in Oman, highlighting the attractiveness of Oman as a high-value industrial investment destination. For Vale, this is a key investment aimed at meeting the growing global demand for high-grade iron ore and further expanding its business in the Middle East.
On March 25, 2025, Xinfeng Iron and Steel (Egypt) Co., Ltd., a Chinese-funded enterprise, and the Suez Canal Economic Zone Authority of Egypt officially signed an agreement in Cairo. It is planned to invest $1.65 billion to build an advanced manufacturing center covering an area of 3.75 million square meters in the Ain Sokhna Comprehensive Zone of the Suez Canal Economic Zone.
The manufacturing center focuses on end industrial products and focuses on high-value-added industries such as automobiles, construction machinery, and household appliances. It is planned to build nine factories, a solid waste treatment workshop, and a research and development training center, which will be completed in two phases over five years.
The location of this project, the superior geographical location and convenient land conditions of the Suez Canal Economic Zone, may have played an important role in Xinfeng Iron and Steel's such large-scale investment decision.
In addition to the above key projects, other Chinese iron and steel enterprises are also investing and laying out in the Middle East and North Africa regions. For example, Oman Energy Development Company (EDO) signed a "Memorandum of Understanding" with Jiangsu Changbao Steel Pipe Co., Ltd.; China's Yongjin Technology Group Co., Ltd. recently plans to jointly establish CANDAX Metallurgical Industry and Trade Co., Ltd. in Turkey with Blue River Holdings (Singapore) Pte. Ltd. and Hainan Fuxin Hui Investment Co., Ltd. to build an annual production capacity of 400,000 tons of cold-rolled stainless steel processing project. Rongsheng Bunyan Company has decided to invest in building a steel plant with an annual production capacity of 500,000 tons in Saudi Arabia. At the same time, Tianjin University of Technology and Delong Group also plan to jointly build an electric arc furnace steel plant with an annual production capacity of 10 million tons in Saudi Arabia. In addition, Shenqing is considering investing $2 billion in Egypt for the production of cast iron pipes and steel products.
China's steel import and export from January to May 2025
China's steel imports and exports from January to April
