Posted on 22 Apr 2025
Saudi medium and small rebar producers, along with induction furnace route and rebar re-rollers, have cut rebar prices, widening the gap with the benchmark.
Despite a drastic drop in scrap prices in the latest round of Turkish transactions, local Saudi scrap remains firm and is not decreasing due to the liquidity crunch in the country. Scrap dealers have reduced their intake from collectors since their receivables are delayed, but they are paying collectors in cash, Kallanish notes.
"In the past we have experienced that the local scrap buying prices increased while rebar prices either decreased or remained stable driven by market setters, which hurt scrap-reliant induction furnace route steel producers," comments a senior mill official. "The local demand is still weak after Ramadan, and if rebar prices fall further while scrap prices rise, the medium and small steelmakers will suffer. This will be perceived as deliberate attempt of punishing small mills."
Within a week, the Saudi benchmark mill is expected to announce its rebar prices for May rolling and its scrap purchase prices. Today imported scrap will not exceed $350/tonne (SAR 1,321.5) cfr Jubail or Dammam for HMS 80:20. Locally supplied scrap for the same grade is priced at and above SAR 1, 575/t ($420/t) delivered. After adding the inland transport and clearance for the imported scrap, the difference between local and imported would be around SAR 200/t ($53/t), a level that cements the reputation of Saudi scrap as ultra-high in the global arena.
This week, small and medium mills in the central region (Riyadh & Al Kharj) are offering rebar at SAR 2,130-2,160/t ex-works of which the low-end offered to Dammam is at SAR 2,160/t delivered. This has compelled Dammam-based SNS and Al Jazeera to reduce their prices to SAR 2,180-2,200/t.
The benchmark mill's rebar is sold in the wholesale (between traders) at SAR 2,330-2,350/t, with the low end of the range being ex-works and the high end delivered in nearby locations. Retail is priced at SAR 2,370-2,380/t delivered, with both scenarios requiring cash payment.
There is direct correlation between oil prices and projects. Following the decline in oil prices as a consequence of US President Donald Trump's tariff announcements, rebar demand in the local market continues to be weak. Local standard billet (3 sp) has softened to SAR 1,950-1,980/t ex-works, and imported same-specification billet is priced by the Far East suppliers at $350-355/t cfr (liner out) West Coast ports.
Source:Kallanish
