The Saudi benchmark mill has maintained its scrap purchase prices unchanged for June transactions. Due to recently increased transportation costs, scrap dealers in Riyadh are directing most of their shipments to Riyadh-based buyers who are willing to pay more than the benchmark mill's rates. This has allowed these dealers to profit from the higher freight costs.
The benchmark mill's delivered scrap buying prices, excluding 15% VAT, are set at SAR 1,800/tonne ($480/t) for HMS 1&2 (80:20), SAR 1,850/t for shredded scrap, and SAR 1,900/t for bonus scrap. These prices are below the current market levels in Saudi Arabia.
In April, the Saudi benchmark mill had also kept its scrap buying prices unchanged, with HMS 1&2 (80:20) at SAR 1,800/t, shredded scrap at SAR 1,850/t, and bonus scrap at SAR 1,900/t, all delivered and excluding 15% VAT.
The Saudi scrap metal recycling market is expected to grow significantly in the coming years, driven by increasing demand for recycled metals from various industries and government initiatives to promote waste management and recycling activities. The market currently has a high level of concentration, with a Herfindahl-Hirschman Index (HHI) of 10,000 in 2023, indicating a monopolistic market structure.
