Saudi Arabia has lifted the import duty on steel rebar to ease a shortage in the kingdom as prices rise for rebar feedstock, a Ministry of Trade and Industry spokesman said yesterday.
"There are no import duties on rebar now because of a shortage in Saudi and we want to encourage traders to ship the steel here," he said. "This is a time when prices are high and traders don't want to pay duties on shipments."
The kingdom wanted to prevent a shortage from delaying construction projects, the spokesman said. Top oil exporter Saudi Arabia is spending billions of dollars on infrastructure as it looks to diversify the economy. State spending has provided a buffer against the global economic downturn. The removal of import duty reverses a five per cent tariff the Saudi Government imposed in January and comes after the price of steel billet in the Black Sea rose.
Steel billet producers in the Black Sea region are among the biggest suppliers of steel billet to the Gulf.
Billet is used to manufacture the construction material rebar. Rising prices for billet have pushed rebar prices in the Gulf to about $800 (Dh2,938) per tonne from $550 earlier this year, traders said.
The government is also looking at ways to prevent traders stockpiling the metal, the spokesman said. It plans to inspect steel warehouses, he added.
"We don't want to have an artificial shortage of steel because traders are hoarding and trying to sell it later when prices are higher," he said. Saudi Arabia is one of the largest steel producers in the region.