In a noteworthy turn of events within the Saudi steel market, rebar prices between traders have experienced a significant increase in early 2024. This uptick follows the removal of the project discount in January, prompting all traders to secure rebar at a uniform price of SAR 2,325 per tonne ($620), with deliveries arranged on credit backed by a bank guarantee or Letter of Credit (LC).
This week witnessed a robust rise in the quotes exchanged between traders for the benchmark mill's rebar within the wholesale market. The current pricing spectrum stands at SAR 2,280-2,300 per tonne ex-works or for delivery within the same city. This reflects a notable escalation compared to the preceding week's quotes, which fluctuated between SAR 2,250 and SAR 2,280 per tonne. For rebar deliveries scheduled for January, Al Ittefaq has set its quote at SAR 2,275 per tonne, while Al Rajhi maintains an unchanged position for the second consecutive month, holding an average of SAR 2,257 per tonne.
Both quotes include delivery and are offered on credit terms. Al Yamamah is currently selling rebar at SAR 2,200 per tonne with a cash payment requirement. Third-tier mills are also active in the market, quoting ex-mill prices at SAR 2,140 per tonne in Jeddah, SAR 2,150 per tonne in Riyadh, and SAR 2,180-2,200 per tonne in Dammam. Reports indicate that the benchmark mill has recently renewed Memoranda of Understanding (MoU) contracts with all known traders, even including those who were excluded from the MoU scheme in 2023. Commenting on the current market dynamics, a trader observed, Traders are contending with persistently high rebar inventories, coupled with stagnant demand. The situation is exacerbated by the recent 53% hike in diesel prices announced last week, contributing to increased costs. This surge in rebar quotes between traders underscores the evolving landscape of the Saudi steel market in 2024.
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