Saudi Arabia has lifted the import duty on steel rebar to alleviate a shortage in the Kingdom as prices rise for rebar feedstock.
Over the past few weeks steel prices have risen due to strong demand on the domestic market.
As Saudi Arabia embarks on massive construction projects, demand for steel is expected to rise this year by 8% with consumption nearing 6.4Mt, Saudi Basic Industries Corporation (SABIC) said recently.
The rise in steel prices and increases in other input costs have raised fears over the viability of some projects. The Kingdom wants to prevent a shortage from delaying construction projects, a trade ministry spokesman said.
Saudi Arabia is spending billions of dollars on infrastructure as it looks to diversify its economy away from oil.
State spending has provided a buffer against the global economic downturn. Saudi Arabia, one of the largest steel producers in the region, has the capacity to manufacture 8.4Mt/y, according to industry association Arab Steel.
The removal of import duty reverses a 5% tariff the Saudi government imposed in January and comes after a rise in the price of steel billet in the Black Sea region.
Steel billet producers in the Black Sea region are among the biggest suppliers to the Gulf. Rising prices for billet have pushed rebar prices in the Gulf to around $800/t from $550 earlier this year, traders said.
Source Arab News, Riyadh; 13 Apr 2010