Strong Demand from Construction and Automotive Sectors Drives Growth in Saudi Arabia's Basic Metals Market

According to the latest market research study published by P&S Intelligence, the Saudi Arabian basic metals market is experiencing significant growth, with projections indicating an increase from 3.4 million tons in 2024 to 4.2 million tons by 2030, reflecting a compound annual growth rate (CAGR) of 3.3%. This growth is largely attributed to the country's expanding automotive industry, the robust development of the electrical and electronics sectors, and government-driven initiatives to diversify the economy away from oil dependency. The National Industrial Clusters Development Program (NICDP) has played a pivotal role in stimulating market growth, ensuring continued investment in the basic metals sector. Furthermore, Saudi Arabia's vast reserves of key raw materials, including aluminum, iron ore, and steel, provide a cost advantage that enhances the competitiveness of its metal industries.

The country is also benefiting from the rapid pace of urbanization, infrastructure projects, and industrialization. With access to strategic ports and domestic resources, Saudi Arabia is positioned to strengthen its role as a key exporter of basic metals to neighboring countries and global markets.

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Key Insights

Product Segmentation:
Aluminum will dominate the market in 2024, holding a 45% share and expected to grow at a CAGR of 3.6% from 2024 to 2030. Saudi Arabia is becoming a key global aluminum producer, with production set to reach 0.8 million metric tons in 2024.

Copper, Zinc, Lead, Nickel, and Tin are also significant contributors, with aluminum driving the fastest market expansion.

Application Segmentation:

The construction sector will be the largest and fastest-growing application, with a CAGR of 3.8% during 2024-2030. Saudi Arabia's urbanization, large-scale infrastructure projects like the NEOM initiative, and ongoing developments such as the Rua Al Madinah project are fueling demand for basic metals, particularly steel and aluminum.

Automotive, electronics, and medical devices are also key application areas, driven by technological advancements and sectoral growth within the Kingdom.

Geographical Trends:

The Al-Riyadh province will hold the largest market share at 40% in 2024 and exhibit the fastest growth with a CAGR of 3.9%. As the capital and economic center of Saudi Arabia, Al-Riyadh is witnessing substantial industrialization and urbanization.

The Eastern Province remains critical for metal production, particularly in steel and aluminum, with major industrial cities like Jubail and Dammam boosting the sector's output.

Government and Industry Dynamics:

Saudi Arabia's efforts to reduce reliance on oil exports are fostering growth in the basic metals market, with significant investments in infrastructure and logistics. Specialized industrial cities and economic zones are being developed to support the sector.

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The government's role in advancing logistics capabilities is vital for enhancing export efficiency, facilitating the growth of basic metal industries.

Technological Advancements and Sustainability:

Technological progress is crucial for increasing the efficiency of basic metal production. Innovations in aluminum production, particularly through the use of recycled materials, are helping reduce costs and environmental impact.

However, environmental sustainability remains a challenge, as the metal production process is energy-intensive, generating significant emissions that necessitate the adoption of greener technologies and processes.

Competitive Landscape:

The Saudi basic metals market is characterized by a consolidated nature, with key players focusing on vertical integration to control different stages of the manufacturing process. This integration helps reduce costs and improve supply chain resilience.

Companies are also actively working with the government to enhance domestic production capabilities and integrate local suppliers into the market.

With its strategic investments, favorable resource availability, and government support, Saudi Arabia is well-positioned to continue its growth trajectory in the basic metals market, driving both regional and global demand. The continued expansion of infrastructure, urbanization, and industrial sectors promises sustained growth for the Saudi basic metals industry in the coming years.

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This release was published on openPR.