Middle East logistics disruptions reshape China-GCC steel trade in H1 2026

Chinese steel exports to GCC countries declined by 18pct YoY to 4.54 mln tons during the first half of 2026 from 5.54 mln tons a year earlier, according to MEsteel analysis of Chinese customs data covering steel products under HS Chapter 72 (HS 7207-7229). The decline reflects the profound impact of the Middle East conflict on regional steel supply chains, as shipping disruptions, port congestion, higher freight and war-risk insurance costs, and prolonged vessel delays reshaped procurement patterns across the Gulf.

The impact became particularly evident during the second quarter of 2026, when logistics conditions across the region deteriorated sharply. Many vessels faced extended waiting times before berthing, while uncertainty over shipping schedules, cargo availability and raw material supplies continued to disrupt normal trade flows. Against this backdrop, many GCC steel producers and rerollers increasingly relied on imported billets to maintain rolling operations as supplies of key steelmaking inputs became more difficult to secure. As a result, Chinese exports of non-alloy billets to the GCC surged by 94pct quarter on quarter to around 723,000 tons from approximately 372,000 tons in the first quarter. In contrast, exports of non-alloy hot rolled steel declined by around 36pct, cold rolled steel fell by 66pct, while coated and pre-painted steel shipments dropped by approximately 32pct over the same period. Structural section exports proved comparatively resilient, easing by around 15pct, while non-alloy wire rod exports more than doubled.

Table 1 – Quarterly shift in Chinese steel exports to GCC (Q1 vs Q2 2026)

Country-level data also illustrates how trade flows shifted within the GCC. Saudi Arabia remained the region’s largest destination for Chinese steel exports, with shipments broadly stable at around 2.58 mln tons, declining by just 1.8pct YoY. In contrast, exports to the United Arab Emirates fell by nearly 40pct, reflecting the severe impact of logistics disruptions and port congestion during the second quarter. Oman emerged as the fastest-growing GCC market, with imports increasing by more than 53pct, as buyers increasingly utilized alternative Gulf logistics corridors during the disruption. Kuwait and Qatar both recorded declines of around two-thirds compared with the first half of 2025, while Bahrain remained a relatively small market.

Table 2 – Chinese steel exports to GCC by destination

The longer-term product mix further illustrates how Chinese steel exports to the GCC evolved during the period. Non-alloy hot rolled steel remained the largest export category despite declining 37pct YoY to 1.81 mln tons, while non-alloy billet exports more than doubled to 1.10 mln tons, becoming the second-largest product group. Exports of non-alloy coated and pre-painted steel proved comparatively resilient, falling by around 12pct, while structural section shipments eased by approximately 13pct. Non-alloy cold rolled steel recorded one of the steepest declines among major products, dropping by 44pct.

Alloy steel products weakened even more sharply. Combined exports of alloy steel products fell by around 71pct, driven primarily by a sharp decline in alloy flat steel shipments, while stainless steel exports contracted by approximately 62pct. Despite these declines, non-alloy steel products continued to dominate Chinese steel exports to the GCC by a wide margin.

Table 3 – Chinese steel exports to GCC by product