Saudi Arabian scrap suppliers and merchant billet producers are raising prices due to scrap collection shortages, which is squeezing billet producers amid low rebar prices. 

In Riyadh, tier-three mills are offering rebar at SAR 2,090-2,130/tonne ($557-568) ex-works against cash payment. 

For this week, induction furnace-route billet producers in Saudi Arabia are quoting 4sp billet at SAR 2,010-2,030/tonne ex-works in Jeddah and SAR 1,990-2,050/tonne in Dammam and Riyadh, providing a challenging environment for billet producers. 

The benchmark mill maintained its December scrap purchase prices of SAR 1,120/tonne ($299/tonne) for light scrap, SAR 1,600/tonne ($427/tonne) for HMS 80:20 grade, SAR 1,645/tonne ($439/tonne) for shredded and SAR 1,670/tonne ($445/tonne) for premium, all on a delivered basis with weekly payment. 

However, local scrap demand remains high, and merchant billet producers in Riyadh and Dammam are paying SAR 1,550-1,570/tonne delivered for HMS 80:20 grade. 

The rise in scrap prices, coupled with low rebar prices, is squeezing billet producers' margins in the Saudi market.