DAMMAM, 24 September 2003 — A source at the Saudi Arabian Basic Industries Corporation (SABIC) has said that the corporation approved two projects to supply 1.5 million tons of steel and iron to cover the current shortage in the local market.
SABIC Chairman Prince Saud ibn Abdullah said the corporation agreed yesterday on a new project to supply 500,000 tons of steel and iron to meet the growing domestic demand.
“SABIC approved a project several weeks ago to double its production from 1 million to 2 million at the Al-Mosatahat factory,” he added.
The Saudi market has been suffering from a shortage of steel and structural iron as a result of the construction boom here and in neighboring countries and due to huge demand from Iraq. The Ministry of Commerce took steps to solve the shortage by asking businessmen to reduce export and start importing.
Industry sources say that by doubling production, SABIC will not only help meet the demands of the domestic market but also open prospects for export, which has severely declined in the last few months.
According to figures made available to Arab News nearly 150,000 tons of steel has been imported this year.
Construction industry sources said that once production is increased and new units come on stream, the steel price, which has been constantly on the increase, will come down.
There have also been calls to abolish the import tariff on steel. At present, SR250 per ton is levied on imported steel. Importers say Saudi Arabia is unique in charging a tariff of this magnitude and say abolishing it would automatically reduce prices to a more acceptable level.
