Saudi Rebar Market Ponders Price Hike, Scrap Supply

Rebar prices in Saudi Arabia are going through an unusual phase as Hadeed’s quotes remain lower than its local competitors. There is a rumour among traders that prices could hike in mid-November and some mills may not deliver more than 80% of contracted tonnages with a view to cashing in.
Traders are therefore buying from different mills for restocking purposes, even if it is at higher prices, Kallanish notes.
Hadeed previously kept its long product prices unchanged from the previous month’s quotations. Its November-delivery 12-32mm rebar net price is at SAR 2,700/tonne ($720) and 9mm+ wire rod net price at SAR 2,900/t ($773) delivered. Although other mills were offering rebar at SAR 2,650/t and lower for October deliveries, following the announcement, a few mills quoted November-delivery rebar at higher-than-Hadeed’s price, which is a first. This week, Rajhi Steel and Al Ittefaq are selling at SAR 2,750/t and SAR 2,725/t delivered within the country, respectively.
Watania is invoicing at SAR 2,700/t, while major re-rollers are quoting at SAR 2,650-2,700/t, all delivered. Medium-capacity re-rollers are offering at SAR 2,600-2,650/t delivered within the country for November deliveries, sources confirm.
“Scrap traders have started to deliver scrap to mills and we cannot talk about a shortage, at least since the beginning of this week, but next week amid anticipated price rises they may hold deliveries,” says a senior Saudi mill official.
Hadeed’s parent company, Sabic, announced its January-October interim results last week (see Kallanish passim). Hadeed’s revenue surged 37% on-year to SAR 9.59 billion, thanks to a 42% growth in average sales price, despite a 5% decline in sales volume versus the corresponding period of the earlier year.
Hadeed’s lower price this month could therefore be interpreted as a way of regaining the lost sales volume amid higher steel prices on-year and a steep drop in iron ore prices.