BigMint: UAE domestic ferrous scrap index falls to 10-month low on limited inquiries from mills
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- Local rebar prices decline as producers reduce inventories
- Weak global market impacts UAE scrap prices
Domestic ferrous scrap prices in the UAE continued to decline, dropping AED 44/t ($12/t) w-o-w, driven by dull global fundamentals and sluggish purchasing activity by domestic mills.
Demand for HMS processed scrap in the UAE has remained weak in recent months, causing mid-week prices for HMS (80:20) processed scrap to drop to AED 1,190-1,195/t ($324-325/t), down from AED 1,230-1,240/t ($335-338/t) the previous week. This marks a return to levels last seen in March 2024, touching a 10-month low level.
Bids and workable levels for processed HMS have declined, with buyers now targeting prices between AED 1,150-1,170/t ($313-318/t). The bearish global market and halted export activity have increased market availability, driving prices down. However, traders and recyclers are still quoting prices above AED 1,200/t ($326/t), emphasising the importance of quality and sorting in their negotiations.
As per market insiders, a major mill source targeted this week a level of AED 1,190-1,210/t ($324-329/t) for processed HMS, while some traders indicated domestic levels at AED 1,235-1,240/t ($336-337/t), with bids around AED 1,200-1,210/t ($326-329/t).
According to a representative from an Abu Dhabi-based mill, local market prices remain unchanged, despite little positivity in the global market. They are targeting a range of AED 1,160-1,170/t (316-319/t) for processed HMS.
Another UAE steelmaker source noted bidding for processed HMS scrap at AED 1,150/t this week but now considers AED 1,175/t delivered (approximately $319-320/t) as a workable price.
In BigMint's week 50 market survey, weak trade activity was observed, with approximately 3,000 t of shredded traded at AED 1,230-1,245/t ($335-339/t), followed by 2,000 t of HMS processed traded at AED 1,180-1,190/t ($321-324/t) DAP Abu Dhabi.
Local UAE rebar prices have also declined as some producers offered discounts to reduce high inventories as the year-end is approaching.
Export market
Recent offers for UAE-origin HMS and PNS mix were reported at $370-375/t CFR Port Qasim, showing a slight decline from the $380s/t earlier in December.
In contrast, scrap offers from the UAE to Bangladesh have been limited amid weak demand from buyers in the region.
Despite the AED 400 export tariff on ferrous scrap, the UAE's scrap exports to Asian countries remain significant in CY'24. Market participants have raised concerns about the misdeclaration of HS codes and transshipment through third countries.
HMS (80:20) spread
The average spread between CFR Nhava Sheva HMS (80:20) from Europe and UAE local HMS (80:20) processed scrap increased to approximately $30-35/t. Imported HMS prices for CFR west coast India stood at $356-360/t, while UAE processed HMS offers dropped to $324-327/t DAP.
EMSTEEL integrates green steel into UAE projects
EMSTEEL Group, the UAE's largest steel and building materials producer, has partnered with Modon, a sustainable community developer, to incorporate low-carbon steel into construction projects. The collaboration was formalised through a memorandum of understanding.
"As pioneers in CO2 capture and green hydrogen for steel production, this partnership strengthens our efforts to decarbonise at scale," said Saeed Al Ghafri, CEO of Emirates Steel, part of EMSTEEL Group.
Modon becomes the first UAE developer to adopt green steel. "This step aligns with the UAE's net-zero 2050 strategy and reduces our carbon footprint," noted Modon CEO Ibrahim Al Maghribi.
EMSTEEL's facilities include three DRI plants (4.2 million tonnes capacity), EAFs (3.6 mnt), rebar lines (2 mnt/year), a heavy section mill (1 mnt/year), and a wire rod unit (500,000 t/year).
Outlook: Market activity is expected to increase next week as mills look to restock ahead of year-end holidays, aiming to secure material at lower prices.
