Go to List

UAE: Domestic ferrous scrap index continues to rise w-o-w following global cues

...

Melting Scrap
By
BigMint Bureau
237 Reads
11 Oct 2024, 19:51 IST
UAE: Domestic ferrous scrap index continues to rise w-o-w following global cues

  • UAE mills show mixed interest; domestic scrap to rise further.

  • HMS (80:20) DAP Abu Dhabi spread with CFR India tightens to $30/t.

The UAE's domestic scrap index rose by AED 28/tonne ($8/t) w-o-w driven by a global bullish trend that continues to influence both domestic and export scrap prices in the UAE.

Some mills showed a mixed interest amid moderate inquiries whereas the market expects domestic scrap prices to reach AED 1,300/t for processed scrap and AED 1,375/t for shredded DAP Abu Dhabi.

According to a representative from a major trading house, the last sold prices were AED 1,250/t for HMS processed and AED 1,330/t for shredded.

A UAE-based trader remarked,"The coming days of this year to bring significant surprises for the global economy, including shifts in leadership and potential regional or international unrest."

In BigMint's week 41 market survey, nominal trade activity was observed, with approximately 3,000-4,000 t of HMS processed scrap traded at AED 1,245-1,250/t on a DAP Abu Dhabi basis while 3,000 t of shredded scrap were sold at AED 1,330/t DAP.

BigMint's bi-weekly assessment recorded a sharp increase in HMS (80:20) processed scrap prices, which stood at AED 1,282/t ($349/t) DAP Abu Dhabi, up from AED 1,254/t ($341/t) in the previous week.

Export market

Scrap export demand remained slow, particularly from Bangladesh, where buyers' expectations for the HMS-PNS mix dropped to $390-395/t. In Pakistan, UAE-origin shredded scrap offers increased to $400-405/t. However, demand for these materials remains weak due to sluggish rebar sales in the country, leading to a bearish market response.

HMS (80:20) spread

The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap saw a drop reaching approximately $30-32/t, following the uptrend in UAE domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained range-bound throughout this week and reached $380/t, while UAE HMS (80:20) processed scrap prices remained at $349/t DAP.

The UAE HRC market has paused as buyers await clarity on China's steep price hike. Chinese HRC offers rose to $580/t CFR Jebel Ali for December shipment, up by $40/t since mid-September. While sentiment improved, buyers remain cautious, unsure if demand will be sustained. A small lot of Chinese coils sold at $590/t from stock, but alternative suppliers, including Japan, halted negotiations amid market uncertainty.

Conares, a UAE-based steel producer, has obtained API certification for electric resistance welded pipes, meeting API 5L and 5CT standards. This certification allows the company to supply pipes for sour applications and expand into the US and Canadian markets. The API certification is valid for three years, starting from 25 September 2024. Conares aims to increase its capacity to 3 mnt/year by 2030, focusing on exports and maintaining high-quality standards in the oil and gas sectors.

Outlook

Industry experts anticipate a potential uptick in domestic ferrous scrap prices in the coming weeks. Additionally, rising finished steel prices could support scrap procurement rates for major mills, providing further support to the market. The ongoing export market slowdown is expected to recover which might support rising domestic scrap prices.

11 Oct 2024, 19:51 IST

 

 

You have 1 complimentary insights remaining! Stay informed with BigMint
Login Buy Now
Related Insights
;