Escalating security risks in the Red Sea are raising concerns over steel supply chains to Saudi Arabia, with market participants warning that prolonged disruptions could delay imports, increase freight costs and push up landed steel prices.
Steel shipments from major exporting countries to Saudi Arabia’s Red Sea ports, including Jeddah Islamic Port and King Abdullah Port, could face logistical challenges as shipping companies reassess transits through the region. Any rerouting of vessels or reduction in sailings could extend transit times and disrupt the flow of raw materials and finished steel into the Kingdom.
The heightened security risks have also driven up war risk insurance premiums and freight costs, increasing the landed cost of imported steel products.
Concerns are also being amplified by continued uncertainty surrounding the Strait of Hormuz, another key shipping route for the Gulf region.
A Saudi steel market participant said the market is closely monitoring how shipping companies respond before making any significant pricing adjustments. The source noted that if shipping disruptions persist or escalate, higher landed costs and supply uncertainty are likely to support firmer steel prices in the Kingdom.
