Newsletter No. 154
January 11, 2006

 

ARAMCO BUYS STEEL PIPES FROM JAPAN AS INVESTMENT SOARS

More evidence has appeared in regard to strong Japan-Saudi trade relations.

Saudi Aramco announced an agreement to buy 200,000 metric tons of steel pipes from six Japanese companies. The total value of the deal is US $260 million. The companies involved include the Nippon Steel Corporation, JFE Steel Corporation, Marubeni-Itochu Steel, Metal One Corporation, and the Sumitomo Corporation. The pipes are to be used for various oil and petrochemical projects, including the giant Rabigh Refining and Petrochemical Company being formed as a joint development between Aramco and Sumitomo Chemical (see Shingetsu Newsletter No. 56).

Because of deals such as this, the Nihon Keizai Shinbun has recently reported that Japan was the top foreign investor in Saudi Arabia between 2000 and 2005, surpassing even the United States. The top seven investors in Saudi Arabia in the last five years were as follows:

1) Japan (about US $15 billion)
2) United States (about US $6 billion)
3) France (about US $5 billion)
4) Bahrain
5) Germany
6) Lebanon
7) Canada

There is no sign of a cool-down in this Japan-Saudi relationship yet.