Saudi Arabian steelmaker Sabic has slashed its rebar price to the domestic market by SAR 240/tonne ($64) to SAR 1,960/t ($523) delivered throughout the kingdom, local sources tell Kallanish.

The move is attributed by market participants to Sabic wanting to stimulate buying amid weak trading activity in the Saudi market. “Sabic has quantity and they want to get rid of it,” one local trader says of the price reduction. “Demand is still weak.”

The steep rate of the price reduction is partly due to the fact that Sabic’s previous price adjustment was a counter-cyclical $27/t increase at the end of September. This was at a time when international prices had been on a two-week downtrend. Emirates Steel in neighbouring United Arab Emirates reduced its rebar price two weeks after Sabic’s previous announcement, and then reduced further in mid-November.

Demand in the Saudi rebar market remains subdued, and mills are hoping to offset this with exports, which resumed in September following a nine-year hiatus (see Kallanish 21 September). However, a Middle Eastern trading source says Sabic has applied to Saudi authorities for an export licence but is yet to receive one, meaning it must continue to rely on domestic sales for now.

Despite its reported problems selling rebar, Sabic increased crude steel production by 7.3% on-year in October to 470,000 tonnes, according to worldsteel (see Kallanish 23 November). Direct reduced iron production surged 58% to 490,000t.