Insufficient rebar trade across the Gulf Cooperation Council (GCC) and the recent move of Saudi Arabia aiming to protect its market from regional imports have been weighing on the billet trade although availability is limited due to some maintenance works. Current billet offers are considered to be high, even though they have declined by $10-25/mt over the past couple of weeks. In the meantime, offers from distant suppliers are not view as workable.
In the UAE, offers are mainly heard from one of the Omani mills at $660-665/mt CPT, while the main seller from the same country has been undergoing a three-week maintenance and so it is not actively offering. The same situation applies to a Bahraini-based seller since buyers report there have been no offers for a while from the seller. The latest ex-Iran offers have been reported at $650/mt CFR, but buyers expect to see $620-630/mt CFR soon since the sentiment in the rebar market has been weakening.
In the import segment, some ex-India offers have been reported at $670/mt CFR, while some traders have been trying to sell at up to $700/mt CFR. Ex-CIS billet has been offered at $700/mt CFR to Saudi Arabia with no interest seen, while in the UAE there have been hardly any negotiations. “There is no point in asking since freight is $60/mt,” a buyer told SteelOrbis. Currently, the FOB level for ex-CIS billet is estimated at $625-635/mt. As a result, import offers from distant markets are not considered workable.
Overall, in Oman and the UAE the rebar market situation is tense, following the new customs regulation imposed recently by Saudi Arabia. Specifically, effective from the date of circulation all products, finished or semi-finished, coming out from free zones across the GCC will be considered as if they were foreign imports. In addition, the decree stipulates that goods that contain components produced by firms partially or fully owned by Israeli companies will not enjoy any reduced duties. Goods produced by companies which are guided by workforce nationalization principles (with local employees not less than 25 percent of the total number of employees) and in particular, goods with not less than 40 percent of added value may enjoy preferential tarrifs, as SteelOrbis reported earlier. “There is big hassle at the Saudi border now since no one knows what exactly is going on. And for now people pay 20 percent as a deposit for all goods and later we will know,” a producer told SteelOrbis.