JEDDAH, 20 January 2008 — Price of scrap iron — the leftover or discarded iron which is reprocessed for another use — in Saudi Arabia jumped markedly in the beginning of this year to SR1,300 per ton from SR1,200, or an 8.33 percent hike, according to a report published in Al-Eqtisadiah newspaper yesterday.
Industry analysts also forecast an increase in rebar demand in the local market by more than 10 percent during the current year.
Talal Al-Ahdal, an investor in the scrap iron business, said its price rose by about 80 percent last year as against 2006, indicating that the increase was influenced by a decision allowing export of iron to other countries as part of commitment to the World Trade Organization.
“The prices of scrap iron exceeded SR1,200 for the one ton in the beginning of this year, whereas last year prices did not exceed SR1,100,” Al-Ahdal said, adding that request for huge volume of scrap iron from China and India contributed to the price increase. He also said scrap iron dealers were expecting a big jump in the price of iron during the next three years.
However, investors emphasized that scrap iron prices in the Kingdom are always low compared to world prices in the International Iron Stock Exchange.
Traders expected that the Kingdom’s consumption of iron and steel during the next three years would exceed more than 36 million tons with more 13 million tons over the past three years. The volume of consumption throughout the last three years was 23 million tons, an increase covering 80 percent of the market need.