MEIS 2018: Saudi Arabia halts rebar imports, cannot utilize full domestic capacity

Saudi Arabia has not imported rebar in 2018 and cannot utilize its full production capacity due to weak domestic demand, Ahmed Al-Hussain, rebar director of Saudi National Committee for Steel Industry said at Fastmarkets MB’s Middle East Iron and Steel Conference in Dubai on Tuesday December 11.

Saudi Arabia has a combined rebar and wire-rod production capacity of 13.5 million tonnes per year, yet produced just below 6 million tonnes in 2017 and has potentially produced even less in 2018.

The country produced over 8 million tonnes of rebar and wire rod in 2014 at the peak of its production, however, local demand is not as strong now, Al-Hussain said, adding that he believes demand will improve in 2021.

The country used to import rebar - mainly from Turkey – up until 2017, but its domestic production ability should now be enough, the committee said at the session on Saudi Arabia’s steel industry.

China and the United Arab Emirates were regular sources of wire rod supply to Saudi Arabia, but now imports are close to zero.

Saudi Arabia banned rebar exports in 2008, yet repealed the restriction in February 2015 on the condition that there was availability of sufficient quantities of this item in the local market, according to the domestic steel industry trade body.

The Saudi National Committee for Steel Industry was formed earlier in 2018 to support the steel sector in the Kingdom of Saudi Arabia and prevent the flow of steel imports being dumped in the country as a result of the United States imposition of Section 232.

The country also removed the export duties on rebar for two years in 2017 to encourage local producers and domestic industries to compete internationally.

Saudi Arabia is now an exporter of long products and exported a total of 320,000 tonnes of rebar from January 1 until the end of September 2018, 29% of which was exported to Egypt and 28% to Lebanon.

Saudi Arabia exported 200,000 tonnes of wire rod in January-September 2018, 43% of which was sold into East Asia.

Singapore, in particular, has become an important market for Saudi Arabia’s rebar exports in recent years.

Serife Durmus

sdurmus@fastmarkets.com

Published

Serife Durmus

December 11, 2018

19:35 GMT

Dubai