Notwithstanding the prevailing bearish sentiments in the global steel and raw material markets, Saudi Arabian producers of rebar have attempted to prevent prices from falling. In particular, they expect the main support to come from lower supply in the market as a consequence of the new customs regulations on imports, issued at the beginning of July. However, it remains to be seen whether they will be successful, while the business environment in the country has failed to improve so far. According to market insiders, a significant number of construction projects, especially private sector ones, have been almost stopped due to the shortage of labor in the local market, with the latter being a consequence of tourism restrictions due to Covid-19. “The current cost of labour, which has almost doubled, has apparently affected construction activity,” the representative of a rebar mill in Saudi Arabia stated. “In addition to labour issues, the application of a new building code in Saudi Arabia has pushed input costs up by almost 40-50 percent,” he added.
Nevertheless, Saudi Arabia’s largest steel producer and market leader, Hadeed, has not made any changes to its domestic 16-32 mm rebar offer prices, announcing them again at SAR 3,100/mt ($827/mt) CPT, for September production. Due to poor demand, good-sized discounts may be provided,” a trader stated. Al Yamammah’s rebar is likewise available at the level of the previous month, at $767/mt (SAR 2,875/mt) ex-works, SteelOrbis has learned. In the meantime, Rajhi Steel has fixed its domestic rebar offers at SAR 2,850/mt ($760/mt) CPT. All prices exclude five percent VAT.
$1 = SAR 3.75