Weak Correlation Between Saudi Arabia and Turkey Steel Scrap Markets
Saudi Arabia’s steel scrap prices have diverged from Turkey since August 2025. Market participants now rely on local indices rather than Turkish benchmarks. Saudi Arabia steel scrap index, launched in August 2025, tracks HMS 1&2 scrap grades in Jeddah, Riyadh, and the Eastern Province. Low correlations mean contracts previously tied to Turkey moved in the opposite direction of actual local prices.
Local Pricing Gains Importance Amid Growing Steel Demand
Saudi Arabia’s steelmakers, including EAF and IF mills, increasingly favor local benchmarks due to expanding production and Vision 2030 infrastructure projects. Domestic supply remains tight, with mills submitting scrap requirements for 2026. Steel output reached 8.87 million tonnes in January-October 2025, up 12.9% year-on-year, driven by both small IF producers and major EAF-based mills.
Market Impact and Contract Adjustments
The divergence between the Saudi and Turkish markets has affected contracts and pricing. On December 8, 2025, the Saudi domestic HMS 1&2 index was $351 per tonne, compared to $367 per tonne for US-origin CFR Turkey scrap. Analysts note that Saudi scrap typically has lower HMS 1&2 quality ratios, explaining part of the price differential. Government interventions and import strategies aim to stabilize supply and support the growing steel sector.
SuperMetalPrice Commentary:
The Saudi Arabia steel scrap market highlights a global trend toward localized pricing amidst rising domestic capacity. Markets index provides transparency for buyers and sellers, reducing reliance on foreign benchmarks. With Vision 2030 driving infrastructure growth, Saudi Arabia’s scrap market could become a key regional pricing reference.
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