Strong demand of steel in Saudi Arabia leads to shortage

Strong demand of steel in Saudi Arabia leads to shortage

Due to construction operations conducted in Saudi Arabia and Iraq, demand for steel is increasing. Related with this fact, Saudi Arabia is suffering from shortage of steel. Thus, the producers have decided to increase price of various types of steel throughout the country. However, according to the notice released from Ministry of Commerce, it is stated that the shortage is an artificial one that is created by hoarding of steel by traders to cause an increase in prices. Market experts state that, demand for steel and iron to be used in construction sector in Iraq causes traders to stock supplies for coming sales at an inflated price rate, which leads to a shortage. The industry experts have reported that the demand for steel has increased by 9% over last year, whereas the prices have increased more than 15%. To meet demand for steel in the domestic market, the officials stated that, imports from various countries have started, reaching up to an expected 150'000 tons. According to the traders, the rise in prices are due to import tariff on steel, which is SAR (Saudi Arabia currency) 250 per ton. Traders state that the termination of the tariffs would lead to a decline in the prices. It is also stated that , under the scope of meeting the demand for steel, there is a project of establishing new steel factory in the Eastern Province and the Al-Tuwairqi Group is ready for production.