Factories in the Persian Gulf countries and other regions are trying to maintain production while awaiting an improvement in market conditions, despite the decline in steel billet prices. According to the analytical company Kallanish, in the first half of April, prices for commercial billets in the region dropped by $11 per ton, to $449 CFR as of April 18. In Saudi Arabia, some factories sold billets for $520 per ton on EXW terms, while their breakeven point stands at $533, considering scrap and processing costs.
This is reported by Business • Media
“In the event of a temporary production halt, losses will be even greater due to the costs of restarting equipment,” explained a representative of one of the enterprises.
Impact of Price Fluctuations in the Region and Global Trends
In Europe, the price of billets in the first half of April decreased by €3 per ton, to €492 on EXW terms. This is largely due to the decline in rebar prices, as resellers refuse to purchase outdated March prices, forcing producers to make concessions. In China, the price of steel billets also fell by $11 per ton, to $407 on EXW terms as of April 12. Billet stocks in Tangshan decreased last week by 67,900 tons, to 731,200 tons, creating conditions for a potential price increase in the near future. However, this is partially offset by rising rebar stocks among producers, indicating weak demand for finished products. In the context of weak demand, most factories in the region are shifting to importing billets from Southeast Asian countries, particularly from China and Indonesia, as confirmed by the data obtained. In Turkey, billet prices in early April dropped by $10 per ton, to $520 on EXW terms. Local rebar producers are currently hesitant to replenish stocks due to weak demand and are expecting further price reductions, preferring imports from the Southeast Asian region.
Meanwhile, in Oman, electricity tariffs have been increased by 33% during peak hours until the end of July to ensure priority energy supply for the population during the hot season. Initially, this was expected to lead to an increase in rebar prices in the region due to reduced production capacity, but currently, weak demand is keeping prices in check, and any production restrictions are likely to only stabilize them.