SAUDI ARABIA ATTEMPTS TO CONTROL NATIONAL STEEL PRICES
The Saudi Ministry of Commerce & Industry announced a 32-percent increase to the sales price of steel to keep up with the China, Turkey and Qatar.
Posted: June 3, 2010
The Saudi Ministry of Commerce & Industry announced a 32-percent increase to the sales price of steel from March 2009, helping the country keep up with the increased steel prices of other countries, including China and Turkey, which raised their prices $143 per ton and Qatar, which raised steel prices $112 per ton.
Hassan Bin Fadl Aqil, the undersecretary of the Ministry of Commerce and Industry, said that the most important reasons for the high steel prices are:
? Higher shipping rates, which have risen 27 percent from March 2009
? Increased demand for steel in other countries, including the U.S. and Canada
? The high prices of steel manufacturing inputs, as the price of scrap iron in the global market increased 47 percent
? Higher gas prices
The Ukrainian steel union is negotiating with Saudi Arabia to export high-quality Ukrainian iron to the Saudi market. Saudi Arabia's Ministry of Trade and Industry is considering abolishing the 5-percent tax on imported steel.
The recently established Saudi National Steel Company is expected to begin production before the end of 2011. The company will produce 300,000 tons of billet crude annually. Construction of the company's mill has an estimated total investment value of $67 million, and the project aims to cover part of the deficit in the Saudi market for billet crude, which has an estimated deficit of approximately 1.5 million tons per year.
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