In the Saudi Arabian domestic flats market 1.2 mm HRC prices from stockists are at the level of SAR 2,000/mt ($534/mt) ex-warehouse. Meanwhile, Chinese origin offers for 1.5-2.0 mm HRC are at the price level of $570/mt CFR Dammam, whereas the Taiwan origin offers for 1.5-2.0 mm HRC are $530/mt CFR Dammam; both offers are for March shipment.
While the Chinese offers are far from gaining acceptance, it is mentioned these offers may be at more attractive levels in the export markets in the upcoming days. Meanwhile, although flats prices in the local Saudi Arabian market have increased by an average of $10/mt from late January to late February, currently a sluggish trend is observed in terms of imports into this market. In addition, some deals (though not so many) are seen in the local market. While the HRC base price of SABIC is approximately $534/mt at the current exchange rate, it is heard that discounts of $10-20/mt may be seen for deals.
Saudi Arabia's $400 billion worth of infrastructure projects for the next five years may support the return of stocks to normal levels, according to the market players. However, players think that this will happen in time without increasing price levels above the world average. After all, everybody accepts that this generous package will have a positive impact on steel in general.
Despite the drop in oil prices to $40 per barrel and also despite the expected $17 billion budget deficit, the global crisis is not being felt as strongly in Saudi Arabia compared to the rest of the world since this country has a $157 billion budget surplus and low external debt levels. The Saudi Arabian Central Bank has revised its expected growth downwards to one percent from two percent.
US$1 = SAR 3.74548