UAE: Domestic ferrous scrap index largely stable w-o-w on slow procurement from mills

• Slow inquiries from mills push domestic scrap prices down
  
  
• Indian buyers show weak demand for UAE scrap
  
  

The UAE's domestic scrap index remained largely stable w-o-w, primarily due to low local demand and reduced intake by the primary integrated mills. Market sources said that trading activity was subdued this week.

Additionally, sentiments in India -- a major nearshore buyer of UAE scrap -- presented significant challenges for the latter. Indian buyers have not been as aggressive in their purchases as compared to the previous two weeks.

Some mills have shown limited interest amid moderate inquiries, while the market feels prices of processed scrap and shredded could reach AED 1,260/t and AED 1,320/t DAP Abu Dhabi respectively.

According to a representative from a major trading house, indicative scrap prices in the UAE are currently as follows:

• HMS (80:20) ranges from AED 1,170-1,200/t, while processed HMS is priced between AED 1,280-1290/t and fabrication scrap is heard at AED 1,300-1,320/t.
  
  
• HMS mixed scrap is heard at AED 1,100- 1,130/t, with LMS scrap ranging from AED 950 to 1,000/t DAP.
  
  

A UAE-based trader said: "After a recent spike, prices have stabilised, and I have even heard these might be declining locally. The international market is also experiencing a downturn, with prices in Turkiye starting to drop, and iron ore is trending downward as well."

A Dubai-based trading house representative indicated that a major Abu Dhabi steel mill secured shredded material at AED 1,325 to 1,350/t. Current workable levels are AED 1,280/t for processed HMS and AED 1,330/t for shredded material.

In BigMint's week 42 market survey, weak trade activity was observed, with approximately 2,000-2,500 t of HMS processed scrap traded at AED 1,280-1,290/t on a DAP Abu Dhabi basis while 3,000 t of shredded were sold at AED 1,330-1350/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 w-o-w.

Export market

An offer from the UAE for HMS 1 is available at $390/t CFR west coast India for shipment this week in containers. A Dhaka-based buyer noted HMS/PNS offers at $420/t from the UAE and bushelling at $440/t from Malaysia for Bangladesh, but these prices are not deemed as workable levels. For Pakistan, indicative UAE prices include HMS at $385/t, HMS sheared at $395/t, and GI bundle at $380/t, all on a CFR Qasim basis.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap dropped to approximately $28-30/t. Imported HMS prices for CFR west coast India declined to $378/t, while UAE processed HMS prices held steady at $349/t DAP.

Steel market update

In the past week, a re-roller in the UAE successfully secured a shipment of 10,000 t of 150mm rebar-grade billet from an Omani supplier at a price of $515/t, delivered to their yard.

Additionally, another UAE re-roller finalised two contracts with local suppliers: one for 10,000 t at $515/t delivered and another for 5,000 t at $520/t. Notably, just two weeks ago, these suppliers had sold the same quantities to this buyer for $10/t less price levels.

Outlook: Industry experts expect domestic ferrous scrap prices to rise in the coming weeks. Increased finished steel sales are likely to improve scrap purchases from major mills. Additionally, a rebound in India and Pakistan's interest in UAE materials could boost export offers, supporting the upward trend in domestic scrap prices.