In the Saudi Arabian domestic flats market SABIC production HRC prices are at the level of SAR 2,100/mt ($560/mt) ex-works, the same producer's CRC prices are at SAR 2,400/mt ($640/mt) ex-works, while its HDG prices are at SAR 2,800-3,000/mt ($747-800/mt) ex-works. All prices are base prices and are for October production materials.
The producer in question is testing prices which are SAR 300/mt ($80/mt) above its previous levels. Expectations of a continuation of the present price uptrend are becoming increasingly widespread as the prices being tested are gaining acceptance in the local market.
Meanwhile, it is said that the abovementioned price uptrend is based both on demand and low supply. As is well known, global production has seen a tightening. On the other hand, a lively situation still exists in the local UAE market during the current summer season, which is normally a sluggish period. With these developments, everyone is wondering whether the market will manage to maintain its current momentum even in Ramadan. However, the global flat steel markets and the real consumption of flat steel in Saudi Arabia will have to be monitored closely in order to gauge how long the current uptrend will continue.
As may be recalled, in mid-May SABIC increased its base HRC prices from SAR 1,650/mt ($440/mt) to SAR 1,750/mt ($467/mt) ex-works in mid-May. The producer, having then filled its August orders towards the end of June, increased its prices again to SAR 1,800-1,850/mt ($480-493/mt) ex-works for September orders. Most recently, the producer has started its production for October and has increased its base prices by SAR 300/mt on average, as mentioned above.