A new building code that introduced curbs on construction activity allied with other factors to sharply depress steel prices in Saudi Arabia, according to a local report. 

From around 3,508 Saudi riyals ($935.5) in mid September, the price of one tonne of steel plunged to nearly 3,277 riyals ($873.8) this week, the Saudi Arabic language daily Almadina said, citing industry sources. 

“The prices have declined because of lower steel sales as the new building codes depressed private construction activity,” said Nabil Al-Halabi, sales manager at a steel supply company in the Red Sea port of Jeddah. 

He said other depressing factors included disruption of supply chain in some areas and lower steel exports due to an increase in transport rates and petrol prices. 

Omar Al-Salmi, who owns a real estate firm in Riyadh, said there has been a sharp fall in private building activity due to new construction laws introduced this year. 

“Steel and cement prices recorded large increases before the latest decline mainly due to an upturn in large public projects….but there has been recently a sharp downturn in personal home building due to the new code,” he said. 

The Saudi Building Code is a set of legal, administrative and technical regulations and requirements that specify the minimum standards of construction for building in order to ensure public safety and health. 

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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