The cost of rebar produced by Sabic's steel-making affiliate Saudi Iron & Steel (Hadeed) is now about SAR3,800 a tonne.

“The new prices are already in place,” says a senior executive at Sabic. “Sabic has tried to match prices elsewhere in the region. We are still competitive with international prices and Sabic’s rebar prices are marginally lower than those in the Gulf."

On 2 April, Brazilian iron ore producer Vale announced an 86.7 per cent rise in the price of iron ore pellets following the conclusion of negotiations with four of the Middle East’s largest steel makers, including Sabic.

The increase was greater than that expected by the region’s steel producers. “We anticipated a 50 per cent rise but we didn’t anticipate this,” says Hussein Murrar, head of commercial relations at Qatar Steel Company. “This is a very drastic increase in the price of iron ore.”