Posted on 17 Jan 2023
Saudi Arabian domestic rebar demand is lacklustre, and mills are therefore eyeing export markets. The benchmark mill is in the export market for grade 60 rebar for February shipment, and tier-two mills are seeking sales to Kuwait, Bahrain and Egypt.
Due to high interest rates, housing projects have slowed dramatically in Saudi Arabia, and rebar sales for housing projects have fallen proportionally, Kallanish learns from market sources.
To improve liquidity, rebar producers are heard offering a SAR 50/tonne ($13.3) discount for cash payment.
Rebar prices in the retail segment on a credit basis excluding VAT are at SAR 2,550-2,600/t ($680-693) for Hadeed material, at SAR 2,500-2,550/t for tier-two mills – Rajhi and Al Ittefaq – at SAR 2,450-2,480/t for Al Yamamah, at SAR 2,450/t for Watania and SAR 2,350-2,370/t for tier-three mills. The lower ends of the range are for higher volumes, whilst higher margins are for small quantities.
Due to the diesel price hike in January by nearly 10%, transportation costs increased in Saudi Arabia. In January, wire rod imports from the Far East at discounted prices have penetrated the market and will continue to arrive in early February.
For February rolling, rebar prices are expected to be unchanged, but the market expects the project discount on rebar will be lessened from the SAR 150/t given during January for quantities above certain quota limits – a so-called eligibility percentage. The eligibility percentage varies according to customer classification.
Source:Kallanish
