Iron prices dropped by SR775 per ton, SABIC said in a letter to its agents. The new prices take effect Tuesday (today). Abdullah Al-Ammar, chairman of the National Contractors Committee, said the new price per ton was SR1,925 in Riyadh, SR1,945 in Dammam, and SR1,995 in the western region. A ton with dimensions of 16 mm by 32 mm now costs SR2,025. Al-Ammar added that the price drops were due to stalled construction works that resulted to accumulation of iron stocks at distributor depots. Despite the reduction, Al-Ammar said that iron prices in the Kingdom were still 20 percent higher than on global markets, citing the price of a Turkish ton of iron which is around SR1,600. Al-Ammar said a reasonable price would be between SR1,300 and SR1,500 to suit purchasing power, adding that such price reductions should increase sales over the resumption of halted construction projects. He also expected that the move would kick-start the real estate sector in general. SABIC announced last month a reduction of SR1, 245 per ton in all iron dimensions following another reduction of SR720 per ton, bringing the total reduction to 60 percent since last September. Traders in the rebar market attributed the cuts in prices to declining global prices despite announcements from East Asian countries of infrastructure projects worth billions of dollars. China had earlier announced it had allocated more than $10 billion for infrastructure projects over the next few years. Some distributors do not expect further reductions. Abdullah Ghannam said other companies had sent letters to distributors informing them that prices had increased by SR95 per ton to SR2,595, with the price of SR2,595 per ton for iron with dimensions of 16mm to 32mm. The latest SABIC move brought the new price for 8mm iron to SR2,420 per ton, and SR2,380 for 10mm. - Okaz/SG __
