After the Eid holiday, Saudi Arabia's long products market started unexpectedly on Sunday with good demand and increased prices.

Merchant billet producers are receiving numerous export and domestic enquiries for billet. They have thus increased their target price to SAR 1,900/tonne ($507) ex-mill for 130mm 4sp or 3sp modified billet, supported by increased local scrap quotes by SAR 50-75/t on-week. In the finished steel segment, tier-three mills raised their rebar quotes to SAR 2,000-2,030/t from SAR 1,900-1,950/t, both ex-works, notes Kallanish.

Between traders, the price for benchmark mill rebar increased to SAR 2,200/t against cash and SAR 2,250/t on credit, both delivered. For wire rod, against cash payment, this is at SAR 2,200-2,300/t delivered, subject to quantities and buyer category.

"We need another week to understand if this sudden demand increase is healthy and sustainable," explains a buy-side source. "In my opinion, this slight improvement would sustain because Saudi semis and finished longs prices were the lowest in the region. Now, it [longs prices] comes to more workable levels."

Decision-makers at major mills have yet to return from the Eid holiday. They will resume work on Tuesday.

Before the Eid holiday, the benchmark mill and market maker rolled over its rebar and coils prices from June at SAR 2,350/t but postponed the project discount announcement until after business resumed following Eid. This week, the market maker will issue its effective rebar prices. Tier-two and three mills will then surface their exact wholesale quotes for July deliveries.

"I received many calls from the domestic and export markets last Sunday, 2 July. Buyers were eager to pay for billets at SAR 1,875/t ex-mill; however, due to costs, I am not planning to go below SAR 1,900/t ex-works," says a senior Saudi billet mill official.