Recent data from SteelRadar reveals a notable decline in the price of billets in Saudi Arabia, marking a significant shift in the local steel market dynamics. The chart below illustrates the trend over the past few weeks, highlighting a sharp drop in prices that could have far-reaching implications for the industry.
From April 23 to May 9, rebar EXW prices hovered around 610 mt USD, but as of May 10, there was a sudden and sharp drop in rebar prices to around 604 mt USD. After this drop, prices stabilized at around USD 604 mt, indicating that a new equilibrium may emerge in the market.
Meanwhile, Saudi billet FOB prices remained stable at around USD 550 mt.
The global steel market has been experiencing volatility due to fluctuating demand and supply chain disruptions. Lower than expected demand from key sectors like construction and automotive could be influencing domestic pricing in Saudi Arabia. Increased imports of cheaper billets from neighboring countries or regions might also be putting downward pressure on local prices. Imported billets often offer cost advantages due to lower production costs in some regions, and when priced competitively, they can undercut domestic producers, forcing them to adjust their prices to remain competitive.
Dr. Ahmed Al-Rashed, an economist specializing in the Middle East steel sector, commented on the development, stating, “The recent dip in billet prices reflects a combination of factors, including weaker demand, increased competition from imports, and broader economic uncertainties. While this may pose short-term challenges for producers, the long-term outlook remains positive due to continued investment in Saudi Arabia’s infrastructure and industrial expansion.”
Despite the slight decline in rebar prices, billet producers may maintain their margins due to stable demand and limited competition. The current divergence between billet and rebar prices suggests that demand for finished products such as rebar remains strong due to large construction projects currently underway while raw material costs are softening.
The Saudi Arabian steel market is thus experiencing a delicate balance between stable demand for finished products and fluctuating raw material prices. While recent data shows a slight dip in rebar prices, the overall outlook remains positive due to continued infrastructure investments under Vision 2030.
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