The price of steel used in construction in Saudi Arabia has fallen 55 percent in 2009. (Getty Images)Prices of steel used in construction in Saudi Arabia fell 55 percent in the year to end-June but the commodity recorded a near-nine percent rise since the start of 2009, data from the kingdom’s statistics authority showed.
Prices for cement at the end of June also fell by 7 percent from their level a year earlier and were 1.9 percent below their level at the end of 2008, according to the data published on the Central Department of Statistics and Information’s website.
The data’s publication, a first by a government body in Saudi Arabia, followed moves earlier in 2009 to end, under certain conditions, bans on steel and cement exports that have lasted almost a year after construction costs surged to records in 2008.
Steel prices in Saudi Arabia stood at 2,256.9 riyals ($601.6) per tonne at the end of June against 5,021 riyals in June and 2,076.5 riyals by end-December. Steel prices hit a record price of 5,046.2 riyals per tonne in July, 2008.
Cement was priced at 13.63 riyals in June for a 50 kilograms (110 lbs) bag against 14.65 riyals a year earlier, and 13.9 riyals by the end of last year.
Cement prices hit a record 14.95 riyals per bag in May, the month which coincided with the imposition of the export ban.
The surge in construction costs has amplified concerns over the viability of many projects in the kingdom at a time when banks refrained from extending new credit, especially to the private sector, amid the global economic slowdown.
This has helped to slightly ease inflationary pressures in the kingdom, despite a structural housing deficit of some 2 million units.
The annual rise in the rental index – which includes rents, fuel and water – eased to 15 percent in June this year down from an 18.7 percent annual rise a year earlier.