16/03/2010
Customs duties and reducing the capacity production exacerbate the iron crisis.
After a few days of raising the iron prices, the iron crisis signs began to show in the local market with expectations of higher prices for up to 3000 riyals per ton this year. A number of investors and businessmen feared that the iron factories in the Kingdom do not work with full capacity, leading to a shortage in the market and therefore higher prices.
The trader expected the price of iron to 3000 riyals during the year, especially in light of continuing increases in raw material prices in the exporting countries, such as blocks of steel prices which have increased by about $ 140 up to $ 600 within a month, as well as scrap prices have risen by up to $ 100 to $ 400 during the same period, giving the impressions of the continuing increase in prices both at the global or local level.
Dr. Ali Eldayekh (Importer) that the prices of iron linked to the global market, especially that the local factories import raw materials from abroad, which means that the global gains reflected directly on the local market, pointing out that importing firms are currently experiencing difficulty in obtaining offers fixed prices , Turkish factories are resorting to price increases continuously, adding that the price of Turkish iron at a cost of offline after the addition of customs clearance and customs about 2750 per ton for Sizes 16 - 32 mm, with the price of Chinese iron to about 2850 riyals to the same measurements.
He added that oil and iron were the most affected after the global financial crisis, dropping their prices severely, but prices recovered the bulk of the recovery, other than iron, which has begun to recover since the beginning of the year, which took prices to rise after a wave of large landslides during the crisis last year.
Regarding the iron crisis in the local markets and the disappearance of a number of sizes in different regions of the Kingdom, he stressed that the current crisis is not artificial at all, it is the result of rising demands for iron for a number of construction projects and development in various regions, and thus the increase occurring in the steel prices caused by rises in global markets and not related to the domestic market, adding that the current problem in iron deficiency linked to internal factors, notably the failure to ensure the factories to domestic demand through a policy of reducing production capacity, stressing that the factories to intentionally reduce energy productivity due to their inability to keep pace with world prices, given the low price in local markets, which means that it continues to secure the needs of the market costing a lot, what enters it in the category of big losses, pointing out that one of the disadvantages of the power down non-productive plant capacity to supply distributors in the quantities and quotas, as deliberately reduce the quota significantly, so that it no longer able to provide more than 50 per cent and in some cases, more than 20 per cent.
The other factor is the Ministry of Commerce to impose tariffs on imported steel products by 5 per cent, depriving many of the importers the ability to provide large quantities due to high import costs, especially as the price of iron ore importer after customs clearance and transportation will price between 2750 -2850 - SAR for Chinese products and the Turkish Sizes 16 - 32 mm.
«Okaz» detected that it had been tampered by some distributors who resort to raise steel prices from 2200 to 2600 and 2700 riyals per ton, nearly 20 per cent after depriving the market. A number of citizens talked about the existence of delivery dates of iron by foreign labor after 14 days of demand and price of 2600 riyals per ton.
