Al Yamamah for Reinforcing Steel Bars has signed a SAR 270 million contract with Danieli for a new billet plant, with commissioning due in 2029. The investment takes a long-product roller backwards into semi-finished production as Saudi construction demand for reinforcing bar keeps rising.
Al Yamamah for Reinforcing Steel Bars Company, a subsidiary of the Tadawul-listed Al Yamamah Steel Industries, has signed a SAR 270 million contract with Danieli for a new steel billet plant in Saudi Arabia. The Italian group takes the engineering, manufacture, supply and installation of the billet production equipment, in a contract worth about $71 million.
The work is scheduled to run two and a half years, putting commissioning in 2029, with the company expecting the investment to start showing in its results from the second half of 2028. Financing for the next stage is being raised inside the group: the subsidiary has approval to issue 25 million new shares, with Al Yamamah Steel subscribing for 6.3 million of them at a cost of SAR 75.6 million to fund the plant's second phase.
Billet is the reason this is more interesting than the contract value suggests. A rebar rolling mill takes billet — semi-finished square section, cast rather than rolled — and hot-rolls it into reinforcing bar. A mill without a melt shop has to buy that billet, usually imported, which means its margin moves with international semi-finished prices, freight rates and the availability of cargoes. Casting billet in the Kingdom converts a traded input into an internal transfer and shortens the lead time between an order and a delivery to site.
The demand case is the Saudi construction pipeline, which consumes long products in volume: reinforcing bar, wire rod and structural sections for foundations, frames, tunnels, bridges and stadium bowls. Expo 2030 infrastructure packages, the 2034 World Cup stadium programme, the King Salman International Airport terminals, Diriyah and the Riyadh metro extensions are all in procurement or construction at once, and project awards have been rotating toward infrastructure — the most rebar-intensive category there is. Regional forecasts have put GCC rebar demand growth at 10 to 15 percent over five years.
Domestic capacity has been expanding to meet it, though unevenly. Saudi crude steel capacity stands at roughly 12 million tonnes a year, of which Hadeed, which the Public Investment Fund bought from SABIC and which has since taken over Al Rajhi Steel Industries, accounts for about 5.5 million tonnes. Hadeed set out an expansion plan in early 2025 aimed at taking its own output toward 10 million tonnes a year, weighted toward value-added products.
The larger announced projects are on the flat side of the market and none of them is yet building. Essar's Green Steel Arabia scheme at Ras Al-Khair is a 4 million tonne integrated flat complex with its own port, costed at around $4.5 billion and designed around gas-based direct reduced iron feeding electric arc furnaces; it is still working through approvals and project financing, with Al Rajhi Bank mandated to raise the debt and the Saudi Industrial Development Fund expected to anchor it. Tosyali has a plant of similar ambition in the same queue. Announced is not sanctioned, and neither will produce this decade's rebar.
That distinction between flat and long products is what makes the Al Yamamah investment worth separating from the rest. Plate and sheet go into shipbuilding, pressure vessels, pipe and energy fabrication, and Saudi Arabia is addressing that gap through Ras Al-Khair. Construction, by weight, mostly wants long products, and long-product capacity is added in smaller increments by companies that already have rolling mills and customer relationships. Al Yamamah is doing the ordinary version of import substitution: buying the melting and casting end of a chain in which it already owns the finishing end.
The timing is the standing problem with steel investment. Equipment ordered in mid-2026 for commissioning in 2029 arrives after the construction peak that justified it, into a market where several competitors will have reasoned the same way. Saudi Arabia's project pipeline is long enough that this may not matter; the deadlines attached to Expo 2030 and the 2034 World Cup guarantee a decade of demand. But the history of the industry is that capacity ordered in a boom is commissioned in a correction, and the mills that survive it are the ones with the lowest conversion cost rather than the newest equipment.