The Libyan steel market: a temporary improvement — Posts — GMK Center

Libya’s demand for steel at the end of 2026 will be the highest it has been in the last 15 years

Agreements between the opposing forces in Libya have led to a sharp rise in demand for steel in 2026. Political experts note that deep-seated differences remain between the officially recognised Government of National Unity (GNU) in Tripoli and the Government of National Stability (GNS) in Benghazi. This highlights the fragility of the ceasefire. Hostilities could resume at any moment. In that event, steel sales would revert to previous levels.

Industry summary

Libyan Iron & Steel Co. (LISCO) is the sole monopolist and the flagship of the Libyan steel industry. Located in Misrata, it has its own deep-water seaport. Its nominal steel production capacity is 1.7 million tonnes per year. Actual utilisation rates in recent years have been lower due to logistical and energy constraints.

The plant operates using NG DRI–EAF technology. Annual DRI production capacity stands at 1.7 million tonnes. For rebar and wire rod – 800,000 tonnes; for light and medium sections – 120,000 tonnes; for hot-rolled coil (HRC) – 580,000 tonnes; for cold-rolled coil (CRC) – 140,000 tonnes; for HDG – 80,000 tonnes; and 40,000 tonnes for PPGI.

LISCO’s total investment between 2021 and 2025 was estimated at $150 million. This was channelled into maintenance and refurbishment projects. This helped to increase steel production and rolled steel output.

In 2025, the company signed a contract with the German firm SMS Group for the comprehensive modernisation of its rolling mill complex, including hot and cold rolling mills and finishing lines. An agreement was also signed with the German firm Pitek Energy regarding energy efficiency and decarbonisation projects.

The role of the state

State involvement in LISCO’s operations is not limited to mere shareholding. Support is provided in two main areas:

Commercial lending in Libya is severely restricted; the plant’s major investment programmes are funded by the state-owned Sahara Bank and Aljamhoria Bank following political approval by the government. The interest rates on these loans to LISCO are close to zero.

Gas and electricity tariffs for state-owned industrial giants in Libya are not subject to market fluctuations. The government sets them centrally at a minimum level.

These measures enable LISCO to remain competitive in the markets of Southern Europe and North Africa, even taking into account logistical and political costs. The company’s guaranteed domestic sales are ensured by the following mechanisms:

• Exclusive priority in public procurement.

A significant proportion of Libya’s steel consumption is directed towards public construction projects. For these projects, contractors are required to purchase rolled steel from LISCO in accordance with the Regulations on Administrative Contracts, approved by Government Decree No. 563/2007.

• Non-tariff protection against steel imports.

The country operates an import licensing system. Licences are issued by joint decision of the Central Bank of Libya and the Ministry of Economy. For steel traders wishing to import cheap reinforcing bars or long products from Turkey or Egypt, the procedure is highly bureaucratic.

Access to foreign currency at the official preferential exchange rate is strictly limited by the central bank. This makes the large-scale import of steel products unprofitable.

Market profile

The government channels almost all of the rolled steel produced to meet domestic demand. Spot consignments of reinforcing bars and structural sections were exported only sporadically between 2021 and 2025, during periods of falling demand in Libya itself.

Imports of finished steel in 2021–2025 reflected a gradual recovery in the construction sector. Long products were imported on a case-by-case basis, which LISCO was not always able to fully meet. Imports of flat steel are linked to the limited range of steel grades, thicknesses and specialised coatings available at LISCO.

Turkey is the leading importer. It is a key supplier of long products and reinforcing bars. In 2024, the value of supplies stood at $280 million. The top five also include:

• Egypt. It actively supplies construction steel to the eastern regions of Libya controlled by the GNA, which enjoys the political support of the official Cairo government. In 2024, the value of supplies stood at $150 million.
• China, with $92 million in 2024. It is the largest supplier of steel structures, flat steel products and steel pipes.
• Spain, with $45 million. It supplies niche products — specialised flat steel and pipes for the oil and gas sector.
• Tunisia, with $25 million. These volumes were supplied as part of cross-border trade to the western regions of Libya.

Demand for flat steel

Flat steel accounts for around 30% of steel sales. The wind energy, engineering and automotive sectors are absent. The main consumer is the oil and gas industry, represented by the state-owned corporation NOC.

Libya’s main oil fields are located in the east. The trend in Libyan oil production between 2021 and 2025 illustrates the relationship between the GNA and the LNA, with periods of ceasefire alternating with the resumption of armed conflict. This was accompanied by a blockade of oil export terminals.

A diplomatic breakthrough was achieved in 2023. With US mediation, the parties agreed on the distribution of the NOC’s revenues and the stabilisation of its operations. The next step was taken in 2025. For the first time in many years, the authorities in Tripoli and Benghazi were able to adopt a joint national budget for 2026.

This led to the recommissioning of a large number of existing wells and the launch of new ones at the Hamada and Sinavan fields. Italy’s Eni, Spain’s Repsol, France’s Total Energies and Austria’s OMV resumed operations at these fields alongside the NOC. Oil production in 2025 reached its highest level in 12 years.

This required significant volumes of OCTG, the demand for which is entirely met through imports. Supplies come from Turkey, China and the EU. LISCO does not manufacture pipes of this grade.

The increase in production requires maintaining reservoir pressure, laying new in-field pipelines and repairing worn-out pipelines. This creates sustained demand for medium- and large-diameter SMLS and WEL pipes, which are also supplied via imports.

Demand for HRC is driven by the need to construct new storage tanks at oilfields and export terminals, as well as to carry out major repairs to existing ones. The increase in production to 1.35–1.4 million barrels per day by 2025 has placed peak loads on the entire oil storage system.

The expansion of oil production is increasing the workload on Libyan refineries. More HRC is required to repair their primary crude oil distillation columns, pipeline trestles and process enclosures.

Demand for long steel

The residential construction sector accounts for approximately half of Libya’s steel consumption. This consists mainly of reinforcing bars and wire rod. Up to 70–80% of all housing in Libya consists of unauthorised self-builds. These are detached houses that owners construct themselves or with the help of small private teams without any permits. Such properties are not included in official statistics.

The share of centralised state-funded housing construction in the total volume is less than 1%. Large housing estates, laid out before 2011 as part of state programmes at the time, remain ‘on hold’ to this day.

The state in Libya dominates the infrastructure construction sector. However, even here, no large-scale projects were observed between 2021 and 2025 due to political and military conflict. The main projects are characterised by piecemeal restoration and the resolution of individual transport hubs. Among the projects with the highest steel content are:

• The reconstruction and modernisation of the ‘Great Man-Made River’ irrigation system. This required huge quantities of steel and reinforced concrete pipes, as well as rolled steel sheets, to replace worn-out water mains and reservoirs.

The ‘Great Man-Made River’ provides over 70% of Libya’s water supply, particularly for agriculture. Thanks to the work carried out between 2024 and 2026, in July 2026 the system reached a pumping rate of 1 million m³ of water per day for the first time since 2011.

• The reconstruction of Tripoli Airport, which was completely destroyed in 2014 during the fighting, and the construction of a new world-class airport in Benghazi.

The project in Benghazi is valued at $1.3 billion, and the airport is designed to handle 15 million passengers a year. It is one of the largest facilities in Africa. The airport in Tripoli is designed to handle 16 million passengers. Its reconstruction is being carried out by the Qatari company UCC Holding. Preparations are currently underway in Tripoli to commission the first phase of the airport, with a capacity of 6 million passengers per year.

• Construction of the Tripoli Third Ring Road (TTRR). The project is valued at $800 million and involves the construction of 14 multi-level junctions.

The first 6-kilometre section has been commissioned. It features four road bridges and three viaducts. The total length is 23.8 kilometres. The work is being carried out by an Egyptian construction consortium comprising Orascom Construction and Rowad Modern Engineering.

Outlook for steel demand

Political stability, the absence of blockades at export terminals, and the return of foreign companies — these factors are contributing to the increase in Libyan oil production. Between January and June 2026, production remained consistently above 1.35–1.43 million barrels per day. By the end of 2026, the NOC plans to reach 1.5 million barrels.

In that case, annual production will rise to 70–71 million tonnes. This level ensures continued high demand for oil and gas-grade steel pipes and thick-gauge hot-rolled steel for storage tank farms.

A major driver of demand for steel is the Structures A&E offshore gas project by Mellitah Oil & Gas. This is a joint venture between Libya’s National Oil Corporation (NOC) and Italy’s Eni. The project is valued at $8 billion. Tenders and procurement for the design and construction of drilling platforms are currently underway.

By the end of 2027, Structures A&E is expected to reach an annual production rate of 7.75 billion m³. This involves the construction of a 110 km-long subsea gas pipeline and a large tank farm for liquid by-products.

The approval of the joint national budget has enabled a number of infrastructure projects to be ‘unfrozen’. These include the construction of the 1,700 km ‘Emsaed–Ras Ajdir’ motorway. Work is currently underway on the 400 km ‘Tobruk–Emsaed’ section.

Demand for long-length rolled steel will also be supported by the continuation of construction on Phase II of Tripoli Airport and the TTRR.

Another driver is the national Multi-city Specialised Hospitals programme, which was launched in 2026. It involves the construction and major refurbishment of 20 large hospitals across the country. The programme will run up to and including 2027.

Taking these drivers into account, steel consumption in Libya is forecast to rise to 1.4–1.5 million tonnes by the end of 2026. This will be the highest figure in the last 15 years. Of this volume, LISCO will be able to supply 1.15–1.25 million tonnes, with the remaining 0.3–0.35 million tonnes covered by imports.