Posted on 24 Nov 2022
In Saudi Arabia this week, local HMS 80:20 grade scrap prices softened SAR 20-30/tonne ($5.3-8). This was due to the abundance of rebar scrap generated in demolished buildings in the Jeddah region, low demand from merchant billet producers and the recent arrival of previously ordered imported scrap by a major mill.
Two major mills booked five scrap cargoes for a combined tonnage of nearly 150,000 tonnes and five billet cargoes for a combined 220,000-250,000t. One of the billet consignments has arrived and is being unloaded, while one scrap cargo is expected within a week. The deliveries will continue in December, Kallanish notes.
In Riyadh, processed rebar scrap is available at SAR 1,550/t after a SAR 20-30/t on-week decline, and oversized (unprocessed) rebar is at SAR 1,500/t, both delivered to buyer's yard.
Merchant billet producers are offering induction furnace billet at SAR 2,200/t ex-works, unchanged on last week, but some small-capacity mills are concluding deals at SAR 2,170-2,180/t ex-works. The billet market is under pressure from sliding rebar prices, with rebar being sold at SAR 2,450-2,500/t ex-works in the Jeddah region. In Riyadh and Dammam, the lowest rebar quote from tier-three mills is heard at SAR 2,500/t ex-mill.
"There is an abundance of scrap, billets and rebars waiting to be sold. The market is in a state of stagnancy," commends a merchant billet producer. "Following the arrival of big quantities of imported scrap, prices would slide further, which will pull down billet prices if demand for billets does not boost.”
"Rebar prices in the retail segment are lower than mills’ wholesale prices. Traders and stockists are trying to deplete their stocks and demand is not supporting mills’ current rebar quotes. Everybody expected the Neom project will kick off rebar intake, which has not materialised yet. Hopes have been deflated,” he adds.
A rebar re-roller in Jeddah was heard booking two billet cargoes for a combined 15,000-20,000t from Jordan at $555/t cfr Jeddah, and ex-Oman billet deals continue being made at $505/t ex-works Oman. Jordan is exempt from the 10% Saudi billet import duty but Oman material is subject to the tariff.
Southeast Asian blast furnace 150mm 3sp grade billet import offers reduced by $13/t on-week to $520/t cfr Jeddah for late-December/early-January shipment. Ex-Bahrain electric arc furnace 150mm 3sp billet is heard offered at $532-534/t delivered to Riyadh, for December shipment.
Source:Kallanish
