Softer rebar demand in Saudi market reflected in price trend

Market sources confirm that rebar retail prices in the local Saudi Arabian market are standing at SAR 2,450-2,700/mt ($653-720/mt) ex-warehouse, while rebar wholesale prices are varying in the range of SAR 2,300-2,400/mt ($613-640/mt) ex-works. After the deportation of illegal workers from the country, demand from the domestic construction sector has weakened, with rebar prices declining by SAR  150/mt ($40/mt) over the past three weeks. Companies have started to adapt to the new labor law regulations, while demand needs some more time in order to fully pick up.
 
In the meantime, local mills' inventory levels are on the high side and so deals can be concluded at very low levels for cash payments, while a steelmaker is even giving rebar offers to Jeddah at SAR 2,400/mt ($640/mt) delivered.
 
As for the cost side, local scrap prices are standing in the range of SAR 1,350-1,398/mt ($360-373/mt) delivered, while steel mills meet 85 percent of their scrap needs from the domestic market.
 
In the meantime, Turkish rebar offers to Saudi Arabia are standing at $560-565/mt FOB, while five percent duty is applicable for imported rebar. Market players state that, in line with construction projects which are to be implemented, demand for import materials will likely improve.
 
$1 = SAR 3.75