Saudi Arabian steelmaker Sabic has reduced its rebar price for the domestic market by SAR 250/tonne ($67) in order to maintain market share amid lower prices from rivals, market participants tell Kallanish.

Saudi’s largest steel producer is now quoting rebar at SAR 1,800/t ($480) delivered throughout the kingdom.

The last time Sabic altered its price was when it increased three times in as many weeks between the end of last November and middle of December. Back then the raise was the result of rising international raw materials and billet prices. Rebar inventory in the domestic market was said to have eased after mills reduced prices in September and October to shift stock.

Competition in the Saudi market has now intensified. “Local mills are selling very cheap, so Sabic doesn’t want to lose market share,” says a Saudi trader. “It wants to kill this [… competition].”

Sabic’s new price is valid for its distributors who buy their full monthly quota of product. However, if a distributor only takes 60% of its allocation, for example, it will still be charged the previous price. “This way Sabic forces customers to take full material,” a mill source says. “This causes disturbance in the market. SAR 1,800 is achievable only by distributors who know they are able to sell that amount.”

Another producer, Rajhi Steel, announced for the first time a new, reduced rebar price before Sabic, forcing the latter’s hand, the mill source adds. Sabic is typically the market maker in Saudi. Rajhi is quoting at SAR 1,830/t delivered and expected to cut further to below SAR 1,800/t following Sabic’s announcement.

A second trader agrees competition has increased, adding that “… demand is also bad.” He says: “Construction projects are still under negotiation. There is no budget for them.”

All sources agree that Turkish rebar offers to Saudi of around $430-435/t cfr Jeddah theoretical weight are not competitive, especially following the latest domestic price reduction.