Some Saudi Arabia rebar and wire rod items are in short supply due to production stoppages, according to market participants.

Saudi Arabia's benchmark plant has been experiencing technical problems with its internal electrical network since last week and has shut down its furnaces and idled DRI modules, Kallanish understands.

The issue is expected to be resolved in a week to 10 days. The company has sufficient stocks of rebar grade billet, but is looking for wire rod grade billet from the local market and the United Arab Emirates. The mill's wire rod supply is inadequate.

Al Ittefaq is carrying out maintenance shutdowns at its plants in Dammam and Jeedah and is therefore unable to meet demand, resulting in a shortage of Al Ittefaq brand rebar in 12-25mm diameters and 11mm wire rod.

In July, Solb in Jazan sealed sizeable quantities of wire rod deals for nearly 15,000 tonnes at around SAR 2,420/t ($645) delivered as partly paid with the purchase order. In the Western part of the country Egyptian wire rod is offered between traders at SAR 2,420-2,450/t delivered on cash.

The subdued rebar market is seeing price stability. The benchmark mill's rebar in wholesale between traders is available at SAR 2,320-2,340/t delivered on cash and offered in the retail to contractors at and above SAR 2,350/t delivered against cash payment.

It is understood that the benchmark mill, the largest scrap consumer in the kingdom with nearly 1.2 million t in yearly purchasing volume, is changing its scrap purchasing system to an online tendering process. A separate index price is announced for each grade as a ceiling price, from which suppliers are invited to submit their best quotes for the month below the index price. 

It is understood that the newly announced index for HMS 2 grade is SAR 1,550/t delivered, as the previous purchase price was SAR 1,600/t delivered. This will cause domestic scrap prices to fall a minimum of SAR 50/t throughout August, sources report.