The authorities in Saudi Arabia have imposed further restrictive measures in order to fight the spread of the Covid-19 coronavirus, impacting business activities in the construction and steel sectors.
According to the official statement, a 24-hour curfew and lockdowns in Riyadh, Tabuk, Dammam, Dhahran and Hofuf and throughout the governorates of Jeddah, Taif, Qatif and Khobar have been imposed late on the night of April 6. Since the regulation has just been released it will take time to evaluate all the potential effects on business activities. However, steel market players report that construction sites have been practically shut down. “Construction slowed down extensively last week and now it looks like it will come to almost a complete standstill,” a local trader said.
For now, construction companies are seeking to obtain permission from the authorities to renew operations. “If they continue working at least we can deliver some materials, but as of today everything is closed and shut down. Even if there is transportation no one works in cities or retail or wholesale centers,” a rebar producer told SteelOrbis. Others say that there is no big problem with truck transportation, but the key issue is that the warehouses are mostly closed and that material cannot be unloaded. “We are unable to make deliveries to our customers, therefore we put a full [temporary] stop on production,” a steel manufacturer said. Some smaller producers, according to sources, continue operations for now, aiming to create some rebar stock in order to sell once demand rebounds.
In the long run, domestic rebar consumption in Saudi Arabia, which has just started to recover after years of a lull, is expected to be limited again as a lot of construction projects, including the large governmentally-supported ones, will most probably be postponed. “For sure, the investments to build the entertainment cities and sites will be postponed as travelling will be restricted for a while,” a mill told SteelOrbis.