Saudi authorities are looking into plans to allow local steel and cement producers to export excess output as inventories continue to pile up, Al Eqtisadiah reports citing an official.
The move to study the possibility of allowing local producers to export cement and steel is driven by a number of facts, including but not limited to, higher inventories to beyond storage capacities, higher output and some factories’ closure of production lines, Issa al-Issa, spokesman for the Saudi customs authority, says.
Shu’ail al-Ayed, chairman of the national steel committee, says local producers suffer from high stockpiles and have already requested the concerned authorities to open the door for exports.
He adds that current steel stockpiles stand at 1.8 million tonnes, which has forced some producers to reduce output by operating production lines at half their capacity.
Al-Ayed indicates that the total output of Saudi steel manufacturers has fallen by 20 per cent and gross output is no longer nine million tonnes a year.
Furthermore, Al-Ayed says that prices have tumbled by SAR400 per tonne since the beginning of the current year because of the major difference between supply and demand.
Jihad al-Rasheed, chairman of the national cement committee, says local output has edged up by five per cent since the beginning of 2015, while excess production amounts to 22.5 million tonnes.