With a fall in the commodities market acting as a further boon to the industry, many predict the next 12 months could offer a less frantic and more realistic steel market.

“International commodities are going down and now [Saudi Arabia] has started importing more, this should follow the inter-national trend,” says one Riyadh-based contractor who is confident that steel prices will level off in the coming months (Trends: Steel prices take a tumble).

“It is a recent thing,” says the executive. “While imports always took place, the government is ensuring it is being done more and more. We are getting steel from Turkey, Romania and China, and it is going to make a difference.”

The contractor adds, however, that the two-month closure of the Hadeed prefabrication plant for maintenance may postpone any improvement for the period. “It may keep prices high initially - and it is currently about SR4,900 [$1,300] a tonne - but once they finish, prices will go down,” he says.

According to a report published this month by National Commercial Bank, global steel prices rose by up to 67 per cent in the 12 months to May 2008. The report also states that Saudi exports of iron and steel products are set to grow by 14.7 per cent to 13.9 million tonnes in 2008.

Rising steel prices in the kingdom have led to calls from contractors for the government to establish a steel price index to encourage greater stability.