UAE: Domestic ferrous scrap index remain largely stable w-o-w on limited trade

BigMint's UAE domestic ferrous scrap index remained largely stable w-o-w with a marginal drop of AED 2/tonne (t) ($1/t), reflecting a slow market. Additionally, prices have continued to remain at their lowest levels since the past two weeks.

• BigMint's bi-weekly assessment showed a w-o-w decline in HMS (80:20) processed scrap prices to AED 1,225/t ($333/t) DAP Abu Dhabi from AED 1,227/t ($334/t) in the previous week.
  
  

In BigMint's Week 39 market survey, nominal trade activity was observed, with around 4,000-5,000 t of HMS processed and shredded traded at AED 1,225-1,230/t ($334-335/t) and AED 1,330-1,340/t ($362-365/t), respectively, on DAP Abu Dhabi basis.

UAE steel market trends

This week, Emsteel kept its offers for October rebar orders stable. Sources in the UAE indicated that most market participants expected this rollover, with offers remaining at $665/t (AED 2,442/t) ex-works. Other local producers have yet to announce their prices, but a similar stable trend is anticipated in the coming days.

Hot-rolled coil (HRC) domestic trade activity remained sluggish for the week. However, Emirati buyers are favouring ex-Japan HRCs despite slow local demand, particularly in the coated segment. Recent purchases from Japan suggest that UAE buyers may have secured these imports at lower prices.

Additionally, crude steel production in the Middle East increased by 3% y-o-y to 35.5 mnt in the first eight months of 2024, according to the World Steel Association (WSA). However, August saw a 3.2% decline to 3.4 mnt, largely due to reduced output in Iran.

Recent market developments

The UAE and the US signed an agreement to enhance customs cooperation during President Sheikh Mohamed's official visit to the US. Signed by Ali Mohammed Al Shamsi and Troy A. Miller, the agreement aims to strengthen economic ties, increase trade, reduce customs violations, and expand technical cooperation through the exchange of expertise and information, benefiting both nations.

Emsteel is interested in acquiring Spanish steelmaker Celsa's mills in Poland, Britain, and Norway, valued at approximately EUR 1 billion ($1.11 billion), according to El Economista. This potential acquisition is part of Celsa's restructuring plan initiated in February. It remains uncertain whether the mills will be sold together or separately. EMSTEEL, ADQ, and Celsa have not commented.

Export market

Ferrous scrap export demand was sluggish with minimal trades heard.

Pakistan: Current offer levels for HMS (80:20) from the UAE are reported at $375-380/t, while shredded scrap offers to Pakistan were heard at $400-405/t, CFR Qasim.

Additionally, a recent deal for approximately 500-1,000 t of shredded scrap from the UAE was heard concluded at $400/t, CFR Qasim.

Bangladesh: This week, offer levels for UAE HMS (80:20) to Bangladesh ranged between $390-395/t, while bid levels were at $380-385/t. Additionally, no deals were reported in the week.

Meanwhile, no firm offers were heard for UAE material to India.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap increased to approximately $35-40/t, following the slight drop in the UAE's domestic scrap prices. This week, imported HMS (80:20) prices, CFR west coast India, stood at $370-375/t, while UAE HMS (80:20) processed scrap prices declined to $334/t DAP.

Outlook: Market participants expect domestic ferrous scrap prices to remain range-bound with minor fluctuations in the coming weeks. The ongoing slowdown in the export market is likely to stabilise domestic scrap supply.