Dubai: Al Tuwairqi Group, which owns one of Saudi Arabia's top three steelmakers, said on Monday it expects the government before the end of July to end a ban on steel exports that has hurt profitability in the industry.
"Currently, negotiations for reviewing the ban are taking place on a very high level and hopefully it will be lifted in one to two months' time," Al Tuwairqi Group's Chief Executive Tariq Barlas said on the sidelines of a conference.
The Al Tuwairqi family holds a stake of about 77 per cent in Al Ittefaq Steel Products Co, which was producing 2 million tonnes of steel in September, according to its Chief Financial Officer Shabir Rafiqi.
"Last year in April the government imposed a ban on scrap metals and finished steel products because prices increased from $650 (Dh2,385.5) to $1,300 (per tonne). The government wanted to protect local consumers because the price of manufacturing steel is very low in Saudi Arabia," Barlas said at the conference.
The ban, which was enforced at peak prices, has hurt the margins of steelmakers in the kingdom as its implementation was almost immediately followed by a rapid slide in global commodity prices on the back of the economic slowdown.
"Saudi Arabia will soon shift from being an importing country of metals to an exporting one. That is why the government wants to lift the ban," he said.
London-based Middle East Economic Digest reported this month that Al Ittefaq was in talks with 26 banks for the restructuring of more than $1 billion in loans as a result of a rapid fall in steel prices, the slowdown in the construction market and the ban on exports.
Al Ittefaq Steel had a turnover of $773.3 million in 2007 and its net margin stood at about 8-9 per cent and had planned a stock market listing for late last year to help fund expansion projects worth some $2 billion.
Al Ittefaq competes with Hadeed, a unit of Saudi Basic Industries Corp. (Sabic) and the kingdom's largest steel producer.
