Minews - Saudi Basic Industries making more steel as low oil helps growth

(Minews) - Saudi Basic Industries Corp., the world’s second-biggest petrochemicals manufacturer by market capitalization, expects to boost steel production with lower oil prices stimulating demand.

Steel output at the Riyadh-based company known as Sabic will be 6.2 million metric tons this year compared with 6 million tons last year, said Ismail Al-Sulby, a general manager at the company. Low oil prices, which account for 90 percent of Saudi Arabia’s gross domestic product, will be a catalyst for economic growth, he said.

Oil prices dropped 39 percent in the past year as supplies grew from the U.S. to Saudi Arabia and Iraq. The Saudi government is using reserves and borrowing from domestic banks to maintain spending on wages and investments.

“Where there’s economic growth, steel will be moving,” Al-Sulby said at the Bureau of International Recycling conference in Dubai.

Saudi Arabia is boosting scrap steel imports, he said. Shipments of recycled metal into the country will probably jump to 4.4 million tons in 2016 from 3.4 million tons last year, Al-Sulby said. Saudi Arabia’s gross domestic product is forecast to expand to $756 billion this year from $745 billion last year, he said.