Saudi Arabian Companies to Further Develop Steel Production

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Researched by Industrial Info Resources (Sugar Land, Texas)--Iron prices increased more than 30% in Saudi Arabia at the beginning of the second quarter of this year, keeping pace with rising iron commodity prices globally, and then moved back to stability with some assurance that the volatility in prices will not exceed 10% to 15% during the next three years.

The stability of the Saudi steel market has been attributed to an increase in domestic steel production, as many local manufacturers are developing their existing plants or constructing new production lines. Al-Tuwairqi Group is setting up a $2 billion integrated steel complex in Dammam industrial area, with a total annual capacity of 4.3 million metric tons. A second project with the 500,000-ton capacity to manufacture railway line (bar) is undergoing a feasibility study. Saudi Iron & Steel Company (Hadeed) is expanding Jubail Mill Expansion-3 to produce an additional 1 million metric tons a year of steel products, at an investment of $1 billion. Upon completion, Hadeed's capacity will reach 6.5 million metric tons per year. The National Commercial Bank is conducting a brief study focusing on the Saudi steel market. For more information, see May 4, 2010, article - Saudi Arabia Attempts to Control National Steel Prices.

This month, Al-Raghee Steel told the Al Ryad newspaper that it will add 1 million tons to its total production by 2012, increasing it to 1.75 million tons per year.

The Saudi government has imposed a 5% anti-dumping customs tariff on steel commodities and imported steel products to protect domestic manufacturers.

It is worth noting that Saudi Arabia has iron-ore resources in the mining area in Sawawain, near southern Tabuk, that are estimated to hold between 165 million and 397 million tons of ore. This field is mined with the cooperation of London Mining plc (OSL:LOND) (London, England), a company that develops mines for the steel industry. It has 50% stake in the Wadi Sawawin joint venture in Saudi Arabia

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