When a ship loaded with liquefied natural gas departs from an Algerian port, the cargo ship also carries another commodity that is changing the fate of this North African country - steel. Along with fossil fuels, it is reshaping the country's position on the European trade map.

In the first eight months of 2025, Algeria achieved a huge trade surplus of nearly 5 billion euros with Italy. In this impressive report card, in addition to natural gas accounting for 84% of the total export value contributing 5.94 billion euros in stable revenue, a remarkable change is happening - the export value of steel products to Italy has soared to 121 million euros, a year-on-year increase of 169.6%. Behind this number is Algeria's decades long industrial breakthrough. This North African country is trying to break free from the label of a single "energy exporting country", and steel has become its latest key to tapping into the European high-end industrial market and achieving economic diversification.

Energy dominance, steel industry rising

The trade relationship between Algeria and Italy has long been a classic epitome of the relationship between North African resource rich countries and European industrialized countries. From January to August 2025, Algeria's exports to Italy reached 7.05 billion euros, of which natural gas exports accounted for 5.94 billion euros, or 84%, fully demonstrating Algeria's solid position as a core energy supplier to Italy.

However, the second pillar of the trade structure is quietly changing hands. Once unknown steel products, with an export value of 121 million euros and an astonishing growth rate of nearly 170%, have surpassed traditional non energy export categories such as chemical products and refined petroleum products, becoming the strongest engine for export growth to Italy. At the same time, Algeria's imports of refined petroleum products, general machinery, industrial equipment, etc. from Italy have also increased significantly, reflecting the increasing demand for technology and equipment in the country's domestic industrialization process.

This one-to-one comparison of data clearly outlines Algeria's industrial ambition: while continuously exporting energy to obtain capital, vigorously developing local manufacturing, and attempting to reverse export high value-added industrial products to Europe.

From colonial vassal to autonomous breakout

The steel dream of Algeria has run through every stage of its modern history. During the colonial period, France regarded it purely as a supplier of iron ore raw materials and engaged in predatory mining, but strictly suppressed the development of any local smelting capacity, leaving its industrial foundation blank. After independence, the country placed the steel industry at the core of industrialization, and through nationalization and Soviet assistance, established the first batch of local enterprises such as Annaba Steel Plant, and initially established a production capacity framework. However, due to limitations in technology and funding, it remained at a low level.

In the era of market-oriented reform, the introduction of foreign investment and privatization failed to fundamentally solve the structural contradictions of technological backwardness and low-end products, and the steel industry fell into the dilemma of having production capacity but no competitiveness. This history of starting from scratch and exploring twists and turns has laid the foundation for the explosion of steel exports today, and also highlighted the hard won transformation of the current situation.

Resource integration and high-end cooperation

Faced with the challenges of historical accumulation, Algeria launched an ambitious 2030 industrial strategy in the 2020s, aiming to increase its annual steel production capacity to 5 million tons and increase the proportion of high value-added products to over 50%. The current industrial landscape is undergoing restructuring around this goal:

Enterprise restructuring and technological upgrading: Annaba, the largest steel company, introduces UAE capital; Constantine Steel Plant and MCC cooperate to upgrade rolling mills; The newly built Tugurte steel plant adopts the advanced short process electric furnace technology from Danieli, Italy.

Cracking the bottleneck of resources and markets: In order to reduce dependence on imported coke, Algeria is actively exploring the path of using local natural gas to produce directly reduced iron. In July 2025, Algerian companies reached a 1 billion euro agreement with Italian partners to invest in the construction of DRI factories, which will directly enhance their high-quality steel production capacity for the European market.

Finding Certainty in Uncertainty

Despite promising prospects, the road to Algeria's steel rise is still full of thorns. The overcapacity in the European market itself brings enormous pressure of low price competition; The unstable domestic power supply and the continuous shortage of coke resources constrain the continuity of production; The core technology of high-end sheet metal, seamless steel pipes and other products still relies on imports. In addition, the frequent adjustment of export tariff policies by the government to ensure domestic supply has also brought uncertainty to the long-term market planning of enterprises. Keywords: international news, international news and information

However, the explosive growth in Italian steel exports has proven the feasibility of this path. It is not only a highlight of trade data, but also a strong signal that Algeria is firmly embedding its industrial products into Europe - the world's highest standard market supply chain. From being a raw material vassal during the colonial period to today's industrial exporter, Algeria's steel carries a century long dream of a country seeking economic sovereignty and industrial dignity.Editor/Cheng Liting