Posted on 22 Dec 2022
Saudi merchant billet producers expect higher prices and demand in January. In December, demand and sales have been low and, in the remaining part of the month, not much change is expected, notes Kallanish.
Major merchant billet producers in Riyadh and Dammam, which each have over 10,000 tonnes/month of production capacity, are observing induction furnace billet prices unchanged on-week at SAR 2,050/tonne ($546) ex-works. In Jeddah, values are at around SAR 2,000/t ex-works. Buyers’ bids at SAR 2,000/t ex-works are found unworkable by the Riyadh and Dammam mills due to current scrap prices in their respective regions.
Domestic HMS 1/2 80:20 grade scrap is available in Riyadh at SAR 1,600/t, in Dammam at SAR 1,450-1,500/t and in Jeddah at SAR 1,400/t. Oversize unprocessed rebar scrap generated from demolished buildings is offered at SAR 1,250/t ex-works in Jeddah.
“We are expecting an improvement in prices and demand in January. Typically, every December we observe subdued demand and sales. Buyers’ bids for billets at SAR 2,000-2,050/t ex-works are rejected by most billet producers due to scrap costs in the Kingdom,” comments a senior buy-side source.
“Also, rebar prices are softening day-by-day. Recently, a tier-three mill sold rebar to a project in Dammam directly at SAR 2,325/t delivered, bypassing traders due to insufficient margins. If the tier-three mills will continue selling rebar to projects directly, market dynamics will change,” he adds.
All above prices are excluding 15% VAT.
Source:Kallanish
