RIYADH: Saudi Arabia has witnessed a 10-15% decline in steel demand as builders await the rise in real estate prices with the new White Land Tax, the “Iqtisadieh” Saudi Daily reported. According to the report, 1.8million tonnes is the country’s stockpile of steel which has prompted 50% of manufacturers to lower or stop production lines.
The daily said that steel imports represented 7% of demand in the Kingdom, which in 2015 was an 8.6% increase on 2014, but added local producers complain of flooding the market with prices far below those of locally produced steel. It pointed to manufacturers’ need to increase exports, reduce stocks, increase sales and maintain a profitable balance sheet.
The daily quoted insiders saying that unlicensed factories in Saudi are producing nearly a million tonnes of steel and selling at prices up from $20 (SAR75) to $40 (SAR150) less than licensed factories. Saudi’s steel production capacity reaches 9 million tonnes annually.
