The decline in international steel prices and the lack of response from national industry to follow suit, encourage some Saudi contractors to form consortiums to import foreign steel.

International prices of ferrous metals continue to decline during the second week of June, partly as a result of the continuing euro crisis and anticipations of Greek exit from the EU.

Prices continue to decline for the second week in a row to reach $ 630 per ton on June 12, compared to $ 650 a week earlier, while the price of billets - which is a core element in steel manufacturing - has stabilized at the same beginning of the month price of $ 600 per ton in June 5, 2012.

Scrap prices declined to $ 365 per ton on June 12, 2012, compared to $ 390 on June 5, while the price of cast iron stabilized at the same first week of the month price of $ 495 per ton on June 12. Additionally, pellets prices dropped to $ 167 per ton on June 12, 2012, compared to $ 168 on June 5, 2012.

Mohammed Saad, a contractor, said importing steel is supported by official bodies in the Kingdom for use in government projects, as it meets the Saudi standards.

The Saudi Standards Metrology and Quality Organization’s acceptance of one of the largest Gulf steel producing companies increases the ability of GCC companies to compete with their Saudi and foreign counterparts in the local market, thus providing alternatives for consumers and investors, he added.

Khalid Al-Qahtani, another contractor, said the domestic prices are unfairly high in view of the weak international demand for steel affected by fear of a new global economic crisis, causing Saudi contractors to seriously consider forming associations to import steel.