Arab Steel reported that Mr Muhammad Al Madi CEO of SABIC linked the solution for the rebar price crisis in the Saudi market with opening the door for imports and eliminating price differences.
Mr Al Madi called for the elimination of multiple rebar pricing in Saudi market by raising the local quotes to the level of global prices in order to cover the rising cost of steel industry inputs which have seen huge increases as of the beginning of this year.
Mr Al Madi said that the gap between local and global prices costs SABIC SAR 500 of losses per every tonne of rebar as a result of SABIC's social commitment which drove the company to operate with 110% of its nameplate capacity, thus increasing its market share from 55% to 68%, as well as importing 200,000 tonnes of rebar last year to meet the Saudi market needs.
He also pointed out that in order for rebar to enter Saudi market and solve the problem there must be 5% to 10% commercial profit margin for imported material priced more than SAR 2500 per tonne. He added that Saudi Arabia has a capacity of 7.2 million tonnes per year of rebar, which exceeds the market needs of 6.2 million tonne per year.