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Agreement Signed to Establish Saudi Arabia’s 1st Integrated Steel Plate Manufacturing Complex

Officials sign the agreement on Monday, (Aramco)
Officials sign the agreement on Monday, (Aramco)
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Agreement Signed to Establish Saudi Arabia’s 1st Integrated Steel Plate Manufacturing Complex

Officials sign the agreement on Monday, (Aramco)
Officials sign the agreement on Monday, (Aramco)

Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, Baoshan Iron & Steel Co., Ltd. (Baosteel), the world’s leading steel conglomerate, and the Public Investment Fund (PIF) signed on Monday a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom of Saudi Arabia.

Subject to customary regulatory approvals and closing conditions, the joint venture complex is expected to be located in Ras al-Khair Industrial City, one of the four new Special Economic Zones recently announced by Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs.

The complex would bring together Aramco’s unrivaled energy and industrial services ecosystem, Baosteel’s advanced steel plate industry capability and PIF’s strong financial capabilities and investment expertise, said a press statement.

It would be the first facility of its kind in the Kingdom and the Gulf Cooperation Council (GCC) region, advancing the regional steel industry ecosystem. The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating export opportunities.

The facility is expected to have a steel plate production capacity of up to 1.5 million tons per year. It would also be equipped with a natural gas-based direct reduced iron (DRI) furnace and an electric arc furnace, which aims to reduce CO2 emissions from the steel-making process by up to 60% compared to a traditional blast furnace. The DRI plant would be compatible with hydrogen without the need for major equipment modifications, potentially reducing CO2 emissions by up to 90% in the future.

Amin Nasser, Aramco President & CEO, said: “The Kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localization.”

“Under Aramco’s flagship industrial investment program, Namaat, and supported by the government’s Shareek program, this joint venture is expected to create jobs and contribute to economic growth and diversification. This joint venture is also an example of bringing together expertise from other sectors. With Baosteel and PIF supporting in capacity building in the Kingdom’s industrial sector, Aramco aims to create additional value for our company and our partners,” he added.

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said: “PIF is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market. This partnership aims at establishing an integrated steel plate manufacturing facility that will strengthen Saudi Arabia’s industrial development and enable its role as a supplier within the metal industry.”

“It will also build on PIF’s mandate to establish new strategic partnerships locally and globally; localize technologies and knowledge; enable the private sector; and create more direct and indirect job opportunities in the local market. Since 2017, PIF has invested in 13 strategic sectors and established 77 new companies domestically,” he stressed.

Zou Jixin, Chairman of Baosteel, said: “This project is an active practice by Baosteel to explore lower-carbon paths for the steel industry, a major achievement in promoting the international development strategy of Baosteel. The project aims to contribute positively to the localization of the steel industry chain, job creation and local economic prosperity in Saudi Arabia.”

Chen Derong, Chairman of Baowu Group (the parent company of Baosteel), and Hu Wangming, President of Baowu Group, have further endorsed the project with full confidence.

Saudi Arabia would be the project’s primary target market, with plans to export to the GCC and broader MENA region. It is expected to create new jobs and significantly reduce reliance on imported steel, serving customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication and tank and pressure vessel manufacturing. It also would aim to serve the construction, renewables and marine sectors.

The investment aligns with PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive the diversification of the local economy. It will support a number of PIF’s priority sectors that require steel plate and create a more resilient steel industry in the region.

The steel plate complex is supported by the Kingdom’s Shareek program for large companies, which aims to foster greater private-public cooperation, create jobs and enhance the development of the Saudi economy by providing incentives for domestic investment. It also falls under Aramco’s Namaat program, which aims to establish strategic partnerships that drive Saudi Arabia’s economic, supply chain and industrial investment diversification and expansion.

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What Does the Inclusion of Saudi Bonds in the J.P. Morgan Index Mean?

Saudi woman walks at the Saudi stock market in Riyadh - Reuters
Saudi woman walks at the Saudi stock market in Riyadh - Reuters
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What Does the Inclusion of Saudi Bonds in the J.P. Morgan Index Mean?

Saudi woman walks at the Saudi stock market in Riyadh - Reuters
Saudi woman walks at the Saudi stock market in Riyadh - Reuters

Saudi Arabia’s debt market is set for a strategic shift in early 2027, following J.P. Morgan’s announcement that local-currency bonds will be included in its global emerging markets bond index. The move represents a vote of confidence in the Kingdom’s structural reforms and is expected to open the door to substantial capital inflows that will help finance major economic transformation projects.

In a note, J.P. Morgan said the move follows a series of reforms to improve foreign investor access and enhance local market capabilities.

The bank added that Saudi sukuk, Shariah-compliant debt instruments that function similarly to bonds, with a remaining maturity of up to 15 years, will be eligible for inclusion in the Government Bond Index-Emerging Markets (GBI-EM), the most widely tracked benchmark of its kind, with $233 billion in assets tracking it.

J.P. Morgan said eight sukuk issues would be eligible for inclusion, with a total value of $69 billion.

The Kingdom’s inclusion in the index is expected to boost liquidity and demand for sovereign debt, contributing to lower borrowing costs.

In September, J.P. Morgan had placed Saudi Arabia on “Positive Index Watch,” paving the way for its eventual inclusion in the GBI-EM.

Commenting on the decision, Saudi Finance Minister Mohammed Al-Jadaan told Bloomberg that the move reflects continued confidence in the Kingdom’s economic transformation trajectory. He said the inclusion marks a new milestone in Saudi Arabia’s integration into global financial markets, adding that its immediate impact will be seen in broadening and diversifying the investor base and supporting long-term capital inflows into the domestic debt market, thereby strengthening the resilience and stability of the national economy.

The Significance of the Index

The importance of J.P. Morgan’s index lies in its role as a benchmark guiding major global fund allocations, particularly passive funds that track indices automatically. With an expected weighting of around 2.52 percent, Saudi bonds will become a core component of international investor portfolios, increasing government bond liquidity and reducing borrowing costs over the long term, a critical factor for the Kingdom’s economy.

Passive funds play a key role in ensuring steady inflows. Trillions of dollars globally are managed through such funds. Once Saudi Arabia is included in the index, these funds will purchase Saudi bonds to remain aligned with it. Unlike active investors, they do not rapidly buy or sell based on daily news or market sentiment, but continue to hold bonds as long as they remain in the index, providing significant stability to the Saudi debt market. Their participation also ensures a constant base of large-scale buyers, facilitating bond trading at any time.

Reforms That Paved the Way

This inclusion is the result of a series of regulatory reforms highlighted by the bank in its note. Saudi Arabia has improved international investor access by linking to the global Euroclear system, expanding its network of primary dealers to include international banks, and facilitating cross-border settlement and trading. These measures have enhanced legal certainty and transparency, making the Saudi debt market an attractive and secure destination for foreign capital.

Financial Stability Amid Regional Challenges

Beyond its economic dimensions, the move carries strategic significance amid ongoing geopolitical tensions in the region. Increased inflows into local bonds are expected to strengthen the government’s ability to manage any economic fallout from regional instability. It underscores the resilience and attractiveness of the Saudi economy, demonstrating its capacity to attract quality investment and secure the financing needed for its development plans regardless of external challenges.

Business

S&P Warns African Sovereign Credit Rating Risks Likely to Worsen

Central Bank of Egypt building (A.P.)
Central Bank of Egypt building (A.P.)
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S&P Warns African Sovereign Credit Rating Risks Likely to Worsen

Central Bank of Egypt building (A.P.)
Central Bank of Egypt building (A.P.)

S&P Global Ratings warned on Thursday that the risks to African sovereign credit scores were likely to worsen the longer the Middle East war drags on.

The ratings agency said that higher fuel and fertilizer import costs would increase inflation and fiscal strains for countries, "potentially leading to rating pressure".

Egypt, Mozambique and Rwanda are among the "most exposed" the agency said, although Egypt's deep domestic capital markets and Rwanda's high levels of concessional debt provide some offset, according to Reuters.

Less exposed are net-oil exporters Nigeria, Angola and Congo-Brazzaville as well as Morocco, due to stronger foreign-currency reserves.

S&P's "base case" assumed that the conflict will peak and that the Strait of Hormuz will gradually reopen but related disruptions will likely persist for months. A resumption of hostilities and a more prolonged conflict would present a greater threat to many African sovereigns.

The ratings agency said it expected Africa's borrowing costs to increase due to war's impacts and as a result of global risk aversion.

S&P in recent weeks kept Egypt's credit rating on a "stable" outlook and affirmed ratings for Morocco, Ghana and Mozambique.

Business

Gold Slips on Inflation Concerns as High Oil Prices and Stronger Dollar Weigh

An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
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Gold Slips on Inflation Concerns as High Oil Prices and Stronger Dollar Weigh

An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL

Gold prices fell on Thursday, pressured by a stronger dollar and elevated oil prices that stoked inflation worries, as investors tried to assess the conflict direction from stalled US-Iran talks.

Spot gold was down 0.9% at $4,696.71 per ounce, as of 1135 GMT. US gold futures for June delivery fell 0.8% to $4,714.0.

The dollar inched higher, making greenback-priced bullion more expensive for holders of other currencies, while benchmark 10-year US Treasury yields rose to an over one-week high, raising the opportunity cost of holding non-yielding bullion.

"Gold continues to take its cues from the oil market, with rising energy costs keeping the risk of near-term dollar strength and elevated inflation in focus," said Ole Hansen, head of commodity strategy at Saxo Bank.

Iran seized two ships in the Strait of Hormuz as it tightened its grip on the strategic waterway after US President Donald Trump announced he was indefinitely calling off attacks, with no sign of peace talks restarting.

Iranian officials did not say they had agreed to any extension of the truce, accusing Washington of violating it by maintaining a blockade on Iranian trade by sea.

Brent crude oil prices rose above $100 a barrel on the stalled peace talks and as both nations maintained their restrictions on the flow of trade through the strait.

Higher crude oil prices can add to inflationary pressures, increasing the likelihood that interest rates remain elevated. While gold is often seen as an inflation hedge, higher rates dampen bullion’s appeal as it offers no yield.

Meanwhile, a Reuters poll of economists showed the US Federal Reserve will likely wait at least six months before cutting interest rates this year as war-driven energy shocks reignite already-elevated inflation.

"The current consolidation appears more a pause driven by rate uncertainty than a structural shift, and we maintain the view that gold is likely to reach a fresh record high later this year or in early 2027," Hansen added.

Spot silver fell 3.9% to $74.63 per ounce, while platinum lost 3.2% to $2,007.98, a more than one-week low for both metals. Palladium was down 4.8% at $1,470.79, a more than two-week low.