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UAE: Domestic ferrous scrap index drops by $8/t w-o-w as trade activity softens

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Melting Scrap

BigMint Bureau

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29 Nov 2024, 20:41 IST

UAE: Domestic ferrous scrap index drops by $8/t w-o-w as trade activity softens

Market slow despite Emirates Steel's rebar price hike

UAE National Day holiday break to reduce trade

The UAE scrap market saw limited activity this week, with some mills stopping purchases and others lowering their procurement prices. BigMint's bi-weekly assessment recorded a sharp decline of AED 31/tonne (t) ($8/t) w-o-w in HMS (80:20) processed tags, which stood at AED 1,245/t ($339/t) DAP Abu Dhabi.

Market insiders suggest that the market remains slow in terms of activities, with no significant changes expected despite the rebar price increase from Emirates Steel (part of the EMSTEEL group). HMS processed stood at sub-AED 1,240-1,245/t ($338-339/t), while PNS was at AED 1,240-1,260/t ($338-343/t). Shredded offers were at AED 1,290-1,310/t ($351-354/t).

A major steel mill in Abu Dhabi set bids for HMS processed at AED 1,200/t ($327/t), while suppliers asked for AED 1,300/t ($354/t). However, no purchases seemed to have been made at these higher levels. In fact, most companies have put off purchases, and the market remains unclear and especially dependent on buyers.

As per him, offers for HMS processed at over AED 1,250/t ($340/t) were accepted by some buyers, but there was no demand for shredded, which dropped from AED 1,300/t ($354/t) to AED 1,270-1,280/t ($346-349/t). Prevailing PNS processed prices were at AED 1,230-1,240/t ($335-338/t).

As per market participants, current local prices of LMS stood at AED 970-1,000/t ($262-270/t), down AED 20/t from the previous week; HMS (80:20) unprocessed was at AED 1,130-1,150/t ($308-313/t), down AED 15-20/t($4-5/t) w-o-w; HMS processed was at AED 1,230-1,250/t ($332-338/t), down AED 30-32/t ($8-9/t); PNS processed stood at AED 1,240-1,250/t ($334-338/t), down AED 10-15/t ($3-4/t); and fabrication was at AED 1,260-1,270/t ($340-342/t).

A Sharjah-based scrap supplier has kept offers above AED 1,260/t, citing a recent revision in EMSTEEL's rebar offers, which has kept the market outlook bullish. The expectation is that mills will push prices higher. However, trades in the range of AED 1,260-1,270/t ($343-346/t) have been slightly weaker, with minimal transactions taking place.

In BigMint's week 48 market survey, weak trade activity was observed, with approximately 2,000 t of shredded traded at AED 1,260-1,270/t ($343-347/t), followed by 2,000-3,000 t of HMS processed traded at AED 1,230-1,245/t ($335-339/t) DAP Abu Dhabi.

The UAE export market also witnessed limited inquiries but slow activity. An offer for HMS 1 was available at $385-390/t CFR Qasim. A Dhaka-based buyer heard HMS/PNS offers at $405-410/t.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) from Europe and UAE local HMS (80:20) processed scrap dropped to approximately $20-22/t. Imported HMS prices for CFR west coast India declined to $360/t, while UAE processed HMS offers dropped to $339-340/t DAP.

Outlook

During the upcoming UAE National Day celebrations from 30 November to 3 December, the domestic ferrous scrap market is expected to experience a temporary halt in activity. Many mills and processors are likely to slow down or pause their operations. Public holidays typically lead to a reduction in scrap purchases as businesses take a break, and transportation and logistics may also face delays. As a result, the scrap market will likely see limited transactions, with operations resuming after the holiday period.