DUBAI (Commodity Online): At a time when China is tightening its realty industry and which in turn is impacting the demand for steel, Gulf countries have decided to abolish the 5% steel import duty soon to ease supply strain that has been mostly felt in Saudi Arabia.

Finance ministers from the six-nation Gulf Cooperation Council (GCC) examined the proposed measure at a meeting. There is consensus among GCC countries about this proposal.

Saudi Arabia and five other Gulf Arab countries including Qatar, the United Arab Emirates and Kuwait have formed a GCC customs union which imposes a common external tariff for products imported from outside their bloc.

GCC's secretary general Abdulrahamn al-Attiyah said the finance ministers agreed to the custom duty abolition, which would also extend to cement imports, but did not set a timeframe for its implementation.

After a relative lull, steel demand began soaring in the second half of 2009 in Saudi Arabia, fuelled mainly by massive state spending by the world's top oil exporter on infrastructure to diversify the economy and counter the effects of the global economic downturn.

The finance ministers also discussed proposals from Qatar to set up a regional bank for international aid and a Bahraini proposal to set up a stabilisation fund to aid troubled GCC economies should the need arise.