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Vision 2030 in Steel: Saudi Arabia's Metal Industry in Global Competition

© Reve

The relatively young metal industry in Saudi Arabia (Image creation: Reve)

In recent decades, Saudi Arabia has evolved from a pure oil producer to a country with an increasingly diversified economy. A central component of this economic transformation is the development of its own steel industry. In response to Vision 2030, initiated by Crown Prince Mohammed bin Salman, the Kingdom has invested heavily in its industrial infrastructure to reduce dependence on the oil sector. 

The Saudi steel industry is still relatively young compared to established steel producers in Europe, Asia, and North America. Nevertheless, it has developed remarkably dynamically in recent years. With an annual production capacity of around 12 million tons of crude steel (as of 2023), Saudi Arabia has positioned itself as an important regional player. The main production sites are concentrated in the industrial cities of Jubail and Yanbu, as well as in the economic centers of Jeddah and Riyadh. 

Key Players and Infrastructure 

The dominant player in the Saudi steel industry is the Saudi Basic Industries Corporation (SABIC), which is majority-owned by the state oil company Saudi Aramco. Other significant companies include: 

  • Saudi Iron and Steel Company (Hadeed), a subsidiary of SABIC 
  • Al Tuwairqi Holding, a private conglomerate with steel plants in Dammam 
  • Rajhi Steel, one of the country's largest private steel producers 

The infrastructure has been considerably expanded in recent years. It includes modern electric arc furnaces and direct reduction plants that use natural gas instead of coking coal as a reducing agent. This technology choice is economically advantageous for Saudi Arabia due to its abundant natural gas reserves and enables lower CO₂ production compared to traditional blast furnace plants. 

© Midrex

Tosyali Complex Direct Reduction Plant (Copyright: Midrex)

Raw Material Supply: Iron Ore and Scrap 

Saudi Arabia's steel industry is based on a combination of imported iron ore and recycled scrap. 

Iron Ore Imports 

Unlike some of its regional neighbors, Saudi Arabia has hardly any iron ore deposits of its own. The Kingdom therefore imports most of its iron ore for direct reduction plants from: 

  • Brazil (mainly from Vale) 
  • Australia (BHP, Rio Tinto) 
  • South Africa 
  • Sweden (LKAB, specifically for high-quality pellets) 

The Saudi mining company Ma'aden has increasingly been searching for domestic iron ore deposits in recent years, but so far without major commercial findings. However, Saudi Arabia's strategic location allows for cost-effective imports via ports on the Red Sea and the Persian Gulf. 

EAF Model and Scrap Recycling 

Saudi Arabia relies heavily on the Electric Arc Furnace (EAF) model with a growing proportion of recycled scrap. This strategy offers several advantages: 

  1. Lower energy consumption compared to primary production 
  1. Reduced CO₂ emissions 
  1. Reduced dependence on iron ore imports 

The domestic scrap volume is growing parallel to the country's increasing industrialization and urbanization. Additionally, Saudi Arabia imports scrap from neighboring Gulf countries as well as from Europe and North America. 

Companies such as Al Tuwairqi Holding and Rajhi Steel have specifically invested in modern scrap processing facilities that enable efficient use of local and imported scrap sources. The scrap proportion in Saudi steel production is currently around 30-35% and is set to rise to over 45% according to Vision 2030. 

The combination of gas-based direct reduction and a growing proportion of scrap already gives Saudi Arabia an advantage with regard to the global decarbonization goals of the steel industry. 

Global Context: Challenges and Opportunities 

The European steel industry is under massive transformation pressure. The EU climate goals and the European Green Deal have set ambitious CO₂ reduction targets that require billions in investments in new technologies. Companies such as Thyssenkrupp, ArcelorMittal, and Salzgitter have announced extensive transformation programs for the conversion to hydrogen-based direct reduction and electric steel routes. 

At the same time, the European industry is struggling with exploding energy prices that severely impair its international competitiveness. The dependence on imported raw materials such as iron ore and coking coal presents another challenge. In this context, Saudi Arabia, with its low energy costs and growing technological expertise, could become an interesting partner for European steel companies - both as a market for technology and as a potential production location. 

The Asian steel industry, especially China, dominates the global market with over 50% share of worldwide production. However, China is struggling with significant overcapacity and increased environmental pressure, leading to production restrictions and consolidations. Japan and South Korea are increasingly focusing on high-grade steels and specialty products to maintain their market position. 

India is developing into the growth market of the future and has already overtaken China as the most populous country. With its ambitious infrastructure program, India could replace China as the largest steel producer in the medium term. 

For Saudi Arabia, there are opportunities for collaboration with Asian technology leaders, especially in highly efficient production processes and specialized steel products for the booming construction sector in the Kingdom. 

The US steel industry experienced a renaissance under the Trump administration, driven by protective tariffs and the "America First" policy. The current administration has added further infrastructure investments that support steel demand. Nevertheless, the North American industry remains dependent on imports. 

In South America, Brazil, with its rich iron ore deposits, is the dominant player, playing an important role both as a raw material supplier and as a steel producer. 

For Saudi Arabia, protectionist tendencies in the US could make exports more difficult, but at the same time provide incentives for technology transfers and joint ventures to secure market access. 

© Adobe Stock

Saudi Arabia in the global context with Europe, the USA, and Asia (Copyright: Adobe Stock)

Saudi Arabia's Strategic Position 

Saudi Arabia benefits from several structural advantages that strengthen its position in the global steel industry: 

  1. Low energy costs: The enormous natural gas reserves enable cost-effective steel production with prices that are sometimes only a third of the European level. 
  1. Strategic location: The geographical position between Europe, Asia, and Africa facilitates exports to different regions of the world and significantly shortens transport routes. 
  1. Growing domestic market: The ambitious mega-projects within the framework of Vision 2030, such as the $500 billion city NEOM, the spectacular The Line, and the expansion of the holy sites, create stable domestic demand for decades. 
  1. Industrial policy support: The Saudi government actively promotes the development of the steel industry with subsidies and improved framework conditions as part of its diversification strategy. 

The challenges lie mainly in the persistent shortage of qualified domestic workers, the critical water scarcity for industrial processes, and the increasingly tougher global competition in export markets. 

Green Steel Aspect: Saudi Arabia's Strategic Advantage 

Saudi Arabia is increasingly positioning itself as a provider of more environmentally friendly steel in a global market that is increasingly focused on sustainability. This development is taking place in two strategic phases: 

Phase 1: Gas-based Production as Bridge Technology 

Saudi Arabia has a significant competitive advantage over traditional steel producers through its natural gas-based steel production. The use of natural gas in direct reduction plants (DRI) instead of coking coal in traditional blast furnaces enables a CO₂ reduction of about 50% compared to conventional production. 

This relative environmental friendliness is strategically used to gain a foothold especially in markets with strict environmental regulations, such as Europe and increasingly the US. With the introduction of Carbon Border Adjustment Mechanisms (CBAM) in the EU, this aspect gains additional importance as carbon-intensive imported steel will be burdened with additional costs. Saudi steel could gain a competitive advantage here. 

Companies such as SABIC and Hadeed already specifically market their products as more environmentally friendly alternatives and are particularly targeting European customers from the automotive and construction industries who are forced by regulatory pressure to reduce their Scope 3 emissions. 

Phase 2: Hydrogen-based Direct Reduction as Future Vision 

In a more ambitious second step, Saudi Arabia plans the transition to hydrogen-based direct reduction. This technology promises almost complete decarbonization of steel production when green hydrogen is used. 

The biggest hurdle is the extreme water scarcity in the Kingdom. Water is a severely limited resource in Saudi Arabia, which makes the production of green hydrogen through electrolysis difficult. The solution that Saudi Arabia is focusing on is gigantic seawater desalination plants along the coasts of the Red Sea and the Persian Gulf. 

Within the framework of the "Saudi Green Initiative," billions of investments in desalination capacities are planned, which are to be operated with renewable energies. Large-scale projects such as NEOM already include extensive hydrogen production facilities, partly intended for industrial use, including steel production. 

However, critics point out that desalination consumes enormous amounts of energy and thus the CO₂ savings are initially limited as long as sufficient renewable energies are not available. Saudi Arabia is responding to this criticism with the construction of huge solar and wind farms, which are to make up a significant part of the energy mix by 2030. 

The Importance of the Metalflow ALLIANCE for the Industry 

The Metalflow ALLIANCE has established itself as an important forum for the metal and steel industry in the region. As an international trade fair, it connects leading technology providers with local producers and promotes practical knowledge and technology transfer. The event reflects Saudi Arabia's growing ambitions to position itself as a regional center for metal processing. 

For European visitors, the Metalflow ALLIANCE offers concrete benefits: 

Access to a booming market: Saudi Arabia and the entire Gulf region are investing in infrastructure and construction projects on an unprecedented scale. Projects like NEOM (500 billion dollar investment volume) and The Line (a 170 km long linear city) alone create an enormous demand for high-quality steel products. European providers can profitably contribute their expertise in special steels, intelligent building materials, and sustainable construction solutions. 

Technology transfer and cooperation opportunities: The Saudi steel industry is actively looking for technology partners to modernize and expand its production capacities. Particularly in demand is expertise in: 

  • Energy-efficient production processes 
  • Quality assurance systems 
  • Automation and digitalization 
  • Environmental protection technologies 

European plant manufacturers and technology providers can win lucrative contracts here and build long-term partnerships. 

Insights into regional market dynamics: The fair provides a comprehensive overview of developments throughout the Middle East and North Africa (MENA region). Visitors gain valuable insights into regional procurement practices, regulatory peculiarities, and cultural customs that are essential for successful market development. 

Networking and intercultural exchange: The Metalflow ALLIANCE acts as a bridge between European and Arab business culture. It offers a unique platform for building personal contacts, which are of outstanding importance in the Arab business environment. In addition, European participants can learn from the experiences of other international companies that have already successfully established themselves in the region. 

© Messe Düsseldorf

Metalflow Saudi Arabia (Copyright: Messe Düsseldorf)

Outlook and Conclusion 

The Saudi steel industry is at a crucial turning point. With the consistent implementation of Vision 2030, its importance will continue to grow both for the local economy and in the global context. The challenges of the global steel industry - overcapacity, decarbonization, and digitalization - offer the Kingdom the opportunity to make a developmental leap through targeted investments in modern technologies and to position itself as an innovative player. 

The Metalflow ALLIANCE plays a key role as a catalyst for technology transfer and international cooperation. For European companies and professional visitors, it offers privileged access to a dynamic market that continues to promise considerable growth potential despite global economic uncertainties. 

At a time when the European steel industry is struggling with profound structural change and enormous transformation pressure, cooperation with emerging markets such as Saudi Arabia could be an important building block for its future viability. The Metalflow ALLIANCE offers an ideal platform for identifying potential, establishing valuable contacts, and initiating joint projects. 

Learn more about Saudi Arabia in the steel industry at the next wire & Tube, which will take place in Düsseldorf from April 13 to 17, 2026. The internet portal provides you with current industry and product information at www.wire-tradefair.com. 

Further Information and Sources