Huge rise in prices of steel has led to black marketeering of this basic construction material in Saudi Arabia, according to a report.
As per report, some of the steel products are being sold on the black market at prices higher than SAR 400 per tonne to SAR 500 per tonne or prices fixed by the Saudi Arabian Ministry of Commerce and Industry.
Minister of Commerce and Industry Abdullah Zainal Ali Riza warned those responsible for the current crisis in the steel market due to the soaring prices. He said that those found guilty would face stringent punitive measures.
The ministry has sent squads to conduct raids on the steel market in various parts of the kingdom and to take punitive measures against the violators of regulations.
Huge demand due to the construction boom in the kingdom coupled with a price increase on the global market and the shortage of supply are the major factors that resulted in the current soaring prices for steel products. According to sources, prices of steel may increase another 50 percent in the short-term.
Naif Al Baqami, an economic expert, noted that the total productive capacity of Saudi steel factories would reach only 3.75 million tonnes insufficient to meet the annual demand of about 4.75 million tonnes.

Egypt have come 10th among the top 20 steel-products importing countries during the January-September period of 2009, with a volume of 4.9 mt, i.e. an increase by 111 percent over the imports level for the same period of 2008. Algeria followed in the 11th place with 4.4 mt of imports, thus rising by 54 percent compared to the same period of 2008. UAE was 13th with 4.2 mt as compared to 11.6 mt for the same period of 2008, which is a sharp decline by 46 percent. Saudi Arabia took the 20th and last place in the list of top 20 importing countries with 2.2 mt compared to 5.3 mt for 2008. The overall imports volume of the four Arab countries amounted to 15.7 mt.
This came in the work-paper presented by Steve Mackrell, Director of Operations in the London-based Iron & Steel Statistics Bureau (ISSB), to the Arab Steel Summit 2010 held recently in Marrakesh, Morocco. Mackrell projects a rise in imports during 2010 to reach 45 mt for MEAN which include Iran according to ISSB statistics.
Imports of long products, especially rebar, account for 41 percent of the overall figure, followed by semis, especially billets, accounting for 18 percent.
Turkey is the leading exporter for the MEAN region, with Egypt as the prime market for Turkish exports in 2009. Meanwhile, imports of UAE market declined sharply from 5.2 mt in 2008 to only 1.7 mt in 2009.
The MENA internal trade in iron and steel products accounts for a very limited volume within the overall foreign trade flow, as it is estimated at only one million metric tons, according to Mackrell. Meanwhile, internal trade in the EU-27 countries amounts to 78 mt, 65 mt in the ASEAN and 7 mt among CIS. This limited intra-trade in the MENA region could be attributed to the strong demand for steel products in local markets, leading the governments to take action to limit or even stop exports, especially concerning rebar. This, in fact, reduced steel intra-trade, in addition to the fact that prices in local markets are probably better than those in export markets, the thing that encouraged steelmakers to direct their products to the local market rather than to export.

ArcelorMittal announced it has signed a memorandum of understanding (MoU) to establish a joint venture with Turkish partner Dayen to build a steel mini-mill with electric furnace in Sulaimaniyah in Northern Iraq. According to news letter published in ArcelorMittal web site.
The mill would produce in its initial phase up to 250,000 tonne per year of rebars from locally sourced scrap and require investment of US$ 100 million to US$ 130 million, jointly subscribed by ArcelorMittal and Dayen.
Construction is planned to start in the second quarter of 2010 and production is planned to commence early in Q4 2011. Production could eventually increase to 500,000 tons per year.
“There are many opportunities for ArcelorMittal to assist in the development of the country," said Christophe Cornier, member of the Group Management Board. "There is great demand for steel products for the local construction industry, which we aim to meet, working closely with our partner Dayen and the local government in Northern Iraq.”

Iraqi Industry and Minerals Ministry announced the signing of a preliminary Memorandum of Understanding (MoU) with STX of Korea to build a new iron & steel plant in Basra.
A source in the Iron and Steel State Company, one of the companies affiliated to the Industry and Minerals Ministry, said that "the company held talks with the Korean company STX concerning building the new plant with the capacity of 3 million tons at a cost of US$3 billion, in addition to a 500 MW power station", according to news published by the Ministry of Industry and Minerals.
It is not clear yet whether the new plant will replace the rehabilitation and upgrade process announced earlier by the company which will raise the production capacity to one million tons of sponge iron and another million of billets, in addition to one million tons of rebar, investing US$400 million in the process that have been announced by the Ministry of Industry and Minerals in last September.