Steel is not a consumer product you buy from a sample and a photograph. It is a commodity priced by the tonne, its prices move week by week, and a one per cent difference in the delivered weight is enough to wipe out the profit margin on a full container. The importer who handles it the way he handles clothing or accessories loses twice: once on the weight and once on the specification.
What must you define before you ask for a price?
The costliest beginner's mistake is asking for a price for "steel" with no technical description. The Chinese seller will give you a low price for the lowest possible grade, and on arrival you discover that the material is unfit for your project. Before you ask about price, define:
- Form and HS code: rebar, angles, tubes, cold- or hot-rolled coil, plates, clamps. Each has a different HS code and different duties.
- Grade and standard: state the full standard and the grade number, and do not accept the phrase "conforms to specification" without a number. It is the standard that fixes the chemical composition, the yield strength and the tensile strength.
- Dimensions and tolerance: thickness, width and length, together with the acceptable tolerance. Thickness tolerance on coil in particular is the place where short weight most often leaks away.
- Surface treatment: hot-dip galvanised, coated, or black. The weight of the coating is itself part of the price and part of the performance in a coastal climate such as Jeddah and Jubail.
Theoretical weight or actual weight?
This is the most important clause in the entire contract. Theoretical weight is calculated mathematically from the nominal dimensions multiplied by the density of steel, while actual weight is what appears on the scale. Mills normally produce at the lower end of the tolerance, so the actual weight comes in below the theoretical weight by a margin that can reach three or four per cent. If you buy on theoretical weight and pay for it, you are paying for steel that never reached you.
The practical rule: buy on actual weight and ask for a third-party weight certificate at loading. And if the supplier insists on theoretical weight, ask for an explicit discount that compensates for the difference, and state it in the contract as a figure, not as a description.
What is the mill test certificate and why should nothing ship without it?
The mill test certificate (MTC) is a document the mill issues for every production heat, stating the chemical composition, the results of the tensile and bend tests, and the heat number. Ask for it before shipment, not after, and make sure that the heat number it quotes is actually marked on the goods or on the bundle tags. A certificate with no link to the goods that arrive is a worthless piece of paper.
For sensitive projects, ask for an independent test on a sample from the consignment at a neutral laboratory before loading. The cost of the test is a small fraction of the cost of having the material rejected on the project site.
Do steel products need SABER?
Yes, for most items. Products are registered on the SABER platform of the Saudi Standards, Metrology and Quality Organization, which issues the product certificate and then a shipment certificate for each consignment. Rebar and structural building materials are subject to specific technical requirements, and may call for test reports from an accepted laboratory. Open your SABER file as production begins, because waiting for the certificate with the container on the quay means daily port storage charges on cargo that is heavy and bulky.
Anti-dumping duties: the item that overturns the calculation
This is the point that brings down most deals. Some steel items coming from China are subject to safeguard measures or anti-dumping duties imposed by the competent Gulf authorities, and these are additional duties on top of the ordinary customs duty, at rates that can be very high indeed. The rulings are updated, withdrawn and renewed, and they differ from one item to another and sometimes from one specific mill of origin to another.
So: before you give your client a price, verify the measure in force on that precise HS code and on the name of the supplying mill, with your customs broker or from the official sources. Pricing a steel shipment without that check is a risk that can turn a profitable deal into a total loss.
Why is steel shipped in 20-foot containers?
Because steel reaches the weight limit before it reaches the volume limit. A standard 20-foot container holds, in practice, some 25 to 28 tonnes depending on the shipping line and on road weight limits, and that fills only a small part of its internal volume. A 40-foot container, by contrast, will stay half empty while you pay for it in full and still exceed the weight limit.
And remember the mandatory verified gross mass (VGM) declaration before loading: a wrong weight declaration delays the container and exposes you to a fine. Ask the supplier for photographs of the scale and a weight tag with every bundle.
Ports: Jeddah, Dammam or Jubail?
Choose the port of discharge by the location of the project, not by the sailing time. Jeddah Islamic Port serves the Western Region, Makkah and Madinah, while King Abdulaziz Port in Dammam and King Fahd Industrial Port in Jubail serve the Eastern Province, Riyadh and its industrial projects. On cargo as heavy as steel, the difference in inland trucking within the Kingdom weighs far more on the final cost than a difference of two or three days at sea.
A practical summary
A sound steel contract states matters in figures: the standard and the grade, the dimensions and the tolerance, the basis of weight, a mill test certificate for every heat, third-party inspection at loading, and the container weight limit. Sound pricing, for its part, begins with verifying anti-dumping duties before you utter a number in front of your client.
