New export tariffs upset Saudi steel producers: report

Mohammed Al Jabr, vice-chairman of Saudi Arabia’s National Committee of Steel Industry, said the ministry of commerce and investment’s decision to impose higher tariffs on steel exports is currently unfeasible, Okaz newspaper reported.

Local steel producers have expressed surprise at the new tariffs on steel exports, he said adding that this is likely to turn most of them away from being export-oriented.

Steel producers are likely to increase selling prices to bring them in line with higher cost of raw materials globally in order to offset price differentials. This increase is likely to be passed on to the consumer, Al Jabr added.

He said the tariffs should be gradually implemented and steel producers should be given a grace period of up to 12 months to improve energy efficiency, and control costs.

The Saudi government recently approved a new mechanism to calculate the fuel price differentials for steel and cement producers who export their products, Argaam reported.