August 29, 2008

Rebar users in Saudi Arab call for steady supply

Arab News reported that building contractors, real estate investors and consumers in Saudi Arab have accused accredited distributors of price manipulation by artificially creating scarcity of supply with the intention of raising the retail prices of rebar.

The contractors and investors cautioned that the increase in steel prices would not only damage the real estate sector and the collateral sectors, but also threaten government’s plan to revive the real estate market and provide housing for every citizen. They were calling for quick intervention of the Ministry of Trade and Industry to halt such abuses.

Moreover, the contractors said the situation would cause dispute between companies and owners of major projects or private housing because of the steel prices variation from the signing of the construction contracts and the present reality.

Price of rebar has gone up in the Saudi Arab amid a booming construction industry, with distributors claiming that the rise was aggravated by a marked increase in demand in China and East Asia. The Arabic daily Al-Riyadh reported recently that the price of one tonne of rebar is now SAR 250.

The Saudi government had reduced customs duty to 5% from 20% on its imports of steel to limit the rise in prices. However, this has not led to an improvement in prices, the daily reported, as the local market depends heavily on national factories.