BigMint is a Market Intelligence and Price Reporting firm that caters to the data and analytics requirements of businesses in the commodities sector. It publishes real time prices and information, which is impartial, independent and reliable, sourced from all industry interfaces – sellers, buyers, agents and traders. This data is filtered and passed through very stringent, calculative assessments before final prices are derived, thereby giving our clients accurate pricing.

Go to List

UAE: Domestic ferrous scrap index rises by $6/t w-o-w; pressure on market amid dull scrap demand

...

Melting Scrap

BigMint Bureau

191 Reads

6 Sep 2024, 18:40 IST

UAE: Domestic ferrous scrap index rises by $6/t w-o-w; pressure on market amid dull scrap demand

The UAE domestic scrap index rose by AED 21/tonne ($6/t) w-o-w, reflecting a slight improvement in price levels. However, domestic scrap demand remained limited, with only need-based procurements taking place as major mills limit their sourcing due to ample scrap inventories.

BigMint's bi-weekly assessment revealed a nominal rise in HMS (80:20) processed scrap prices, which stood at AED 1,241/t ($338/t), DAP Abu Dhabi, from AED 1,220/t ($332/t) in the previous week.

In BigMint's Week 36 market survey, limited trade activity was observed, with around 3,000-4,000 t of HMS processed scrap traded at AED 1,250-1,255/t, on a DAP Abu Dhabi basis.

Market commentary:

According to a Sharjah-based supplier, EMSteel, formerly Emirates Steel Arkan, has reportedly stopped buying due to sufficient inventory, and there have been no inquiries from other steelmakers so far. The overall market remains sluggish, with no significant demand for exports. Domestically, the market is also sluggish, with prices at AED 1,180-1,200/t for HMS unprocessed, AED 1,230-1,240/t for HMS processed, and AED 1,330-1,335/t for shredded, all on a DAP Abu Dhabi basis.

According to a buyer, the domestic market for HMS processed scrap is currently at AED 1,230-1,250/t, with shredded scrap priced AED 80/t higher than HMS processed on a DAP basis.

Another domestic scrap supplier reported that local scrap prices remain stable, with HMS processed offered at AED 1,240-1,250/t and bids at AED 1,200-1,210/t, while shredded scrap is offered at AED 1,330-1,340/t, with bids at AED 1,300-1,310/t.

A major trading house representative stated that domestic demand remains weak and is limited to need-based buying only. Export market demand is also low. EMSteel's rebar pricing has yet to impact domestic scrap levels. Currently, HMS-processed scrap is offered at AED 1,250-1,260/t, with bids at AED 1,220-1,230/t. Shredded scrap is offered at AED 1,330-1,340/t, with bids at AED 1,310-1,320/t.

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 decline, reaching approximately $25-26/t, following the uptrend in UAE domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained downward throughout this week and reached $364-365/t, while UAE HMS (80:20) processed scrap prices remained at $338-340/t DAP.

Emirates Steel Arkan has been rebranded as EMSteel to align with its growth and sustainability goals. The new identity, revealed on 5 September in Abu Dhabi, emphasises expansion, digital transformation, and global sustainability. EMSTEEL will operate through two divisions: Emirates Steel and Emirates Cement, which includes Al Ain Cement Factory, Emirates Blocks Factories, ANABEEB, and Arkan Bags. The rebranding supports growth in new markets and product lines, with EMSTEEL exporting to over 70 markets. The company remains committed to sustainability, aiming to reduce carbon emissions in line with the UAE's Net Zero by 2050 initiative, with 80% of operations using clean energy and being a leader in low-carbon steel production.

EMSteel, a major UAE wire rod supplier has increased September prices despite competition from Asian suppliers. EMSteel has set its domestic wire rod prices at AED 2,148/t ($584/t) CPT Abu Dhabi and AED 2,162/t ($588/t) CPT Dubai for 6.5-14 mm diameters, AISI/SAE 1006 to 1018 grades. This is a $10/t increase from August. The 90-day credit period remains unchanged. Despite this, challenges persist due to aggressive pricing from foreign sellers, particularly from China, where August deals for SAE 1006, 1008, and 1012 grades were around $535-560/t delivered. Other mills, including Fujairah-based producers and Qatar Steel FZE, are reviewing their pricing strategies. Prices are quoted without 5% VAT.

Export scrap market: Pakistan has inquired about HMS at $365-370/t, down from $380/t last week, with Gujarat-origin buyers seeking $372/t CFR Mundra. While $378-380/t is reasonable for India, buyers are unlikely to accept it.

According to a UAE-origin scrap exporter, buying interest in Pakistan remains low, with hopes for a demand rebound post-rain. UAE-origin HMS offers to Pakistan are at $380/t CFR Qasim, with bids around $370/t. Export demand remains weak, with limited responses at $415-420/t for shredded scrap, which may lead to potential price reductions to stimulate interest.

Outlook

As per industry experts, domestic ferrous scrap prices are expected to remain stable in the short term. However, export activities may see improved realisations from South Asian buyers, particularly in India and Pakistan, once the monsoon season ends.