RIYADH, 14 July — Prices of iron and steel have risen dramatically in the Kingdom following a recent American decision to hike tariff on steel imports by 30 percent. The hike in price of steel has affected the Saudi fabrication industry, which suffered heavy losses. The losses occurred as they had to honor contracts signed at previous prices.
The price hike also hit investors in construction projects hard as the construction cost exceeded previous estimates. The price of sheet iron went up from SR900 to SR1,850 per ton while that of zinc from SR8 to SR13 per meter. The price of steel pipes rose from SR12 to SR21.5.
The Iron & Steel Company, an affiliate of Saudi Basic Industries Corporation, ruled out suggestions that it was responsible for the price hike. The company is the largest producer in the country. “The price of iron and steel shot up in the Kingdom as a result of a hike in prices in world market,” a high-level source at the company told Arab News, adding that prices of iron and steel in the Kingdom were comparatively lower than in many neighboring countries.
The source disputed the allegation that SABIC was monopolizing iron and steel production. “There are four factories in the Kingdom in addition to eight factories in the GCC — in Qatar, Oman, Kuwait and the United Arab Emirates — whose products are freely marketed in the Kingdom.
“Moreover, iron and steel fabrication works from Egypt, Turkey, Ukraine, Russia and other countries, are being dumped in the Kingdom despite their low quality.”
The source emphasized the need for government intervention to protect national products.
Asked about the possibility of enacting an exceptional law to protect SABIC from foreign imports, the source said: “The main reason for the present crisis is the American decision to protect its industries by increasing tariff by 30 percent on steel imports. This has affected not only the Kingdom but several other countries.”
Many countries have taken the case against the US tariff to the World Trade Organization. He also hoped that the Committee to Protect National Industries would take appropriate action in this respect.
SABIC has urged the commerce and industry ministries to quickly intervene in a bid to ward off the negative impact of the US decision. The company fears that the decision would affect its market share and is now trying to find new outlets to market its products.
Despite a rise in iron and steel imports from GCC and other countries, prices have risen substantially. The price of Turkish iron sheets went up from SR800 to SR1,600 per ton while that of Russian from SR800 to SR1,770.