A notable increase in steel prices at subsidiary Saudi Iron & Steel Co. (Hadeed) helped push Sabic’s net profit up 39% on-quarter to SAR 4.74 billion ($1.26 billion) in the second quarter.

Hadeed increased its rebar price on three separate occasions between the last week of March and the end of April as international prices surged, spurred by stronger demand in China. Prior to this it had adjusted its prices on only four occasions since 2010.

Lower sales prices on average in the first half of the year, however, dragged down Sabic’s net profit by -19.5% on-year in the six months to SAR 8.14 billion.

Hadeed slumped to a net loss of SAR 725m in Q1 from a profit of SAR 98.2m in Q1 2015 (see Kallanish 20 April).

In 2015 Hadeed’s sales declined -20% on-year to SAR 10.67 billion, and the firm sank to a net loss of SAR 1.46 billion due to a sharp reduction in steel prices, compared to a SAR 1.35 billion net profit in 2014. This was despite long product shipments increasing 4% on-year to an annual record 3.85 million tonnes.

Reduced government spending on lower oil prices has curtailed steel demand in Saudi Arabia, while low-priced imports have eaten away at domestic steelmakers’ market shares. Hadeed’s crude steel production declined -24% on-year in H1 to 2.36mt.