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UAE: Domestic ferrous scrap index sees slight uptick of $3/t w-o-w; exports outlook uncertain

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Melting Scrap

BigMint Bureau

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8 Nov 2024, 19:43 IST

UAE: Domestic ferrous scrap index sees slight uptick of $3/t w-o-w; exports outlook uncertain

Slowed Indian, Pak demand hits UAE export

Domestic mills drop Nov scrap purchase prices

UAE's domestic ferrous scrap index witnessed a slight uptick of $3/tonne (AED 12/t) w-o-w, increasing by $6/t (AED 23/t) from earlier in the week, followed by a drop of $3/t (AED 12/t). The slowdown in export demand contributed to the price decline towards the weekend.

Market sources indicated moderate trading activity this week, with major mills reducing scrap purchase prices for November shipments. This decline has created a slightly workable environment for sellers, as lower scrap exports have helped maintain better material availability in the domestic market.

BigMint's bi-weekly assessment stood at AED 1,235/t ($336/t) for HMS (80:20) processed scrap witnessed a slight uptick of AED 12/t ($3/t) w-o-w.

Market participants are awaiting updates on UAE scrap exports following complaints from UAE steel producers to Indian customs.

"Despite the export duty, scrap is still flowing from Dubai to India. We expected exports to halt, but the trade continues, with BLs and descriptions altered to bypass the restrictions. This raises concerns about the effectiveness of the duty," said a UAE steel producer.

A Sharjah-based scrap supplier commented that the ongoing investigation into UAE scrap exports will continue to pressure domestic suppliers who provide materials to exporters.

The supplier said that PNS levels are at AED 1,250-1,260/t ($340-343/t), with processed HMS lower by AED 30-40/t ($8-11/t) at AED 1,210-1,220/t ($330-333/t).

A Dubai-based trading representative feels market sentiment would be positive at AED 1,240-1,250/t ($338-340/t) for HMS processed and AED 1,300-1,320/t ($354-359/t) for shredded, though buying interest for the latter is limited, with EMSteel as one of the few buyers at AED 1,300/t ($354/t).

In BigMint's week 45 market survey, moderate trade activity was observed, with approximately 5,000-6,000 t of HMS processed traded at AED 1235-1250/t($336-340/t)DAP Abu Dhabi. However, other mills are refraining from purchasing at higher prices.

UAE domestic scrap prices (excluding VAT): HMS (80:20) unprocessed at AED 1,150-1,170/t ($310-$316/t), HMS (90:10) at AED 1,180-1,190/t ($319-$321/t), and HMS sheared/PNS at AED 1,230-1,250/t ($332-$338/t), fabrication scrap at AED 1,270-1,280/t ($343-$346/t), and end-cutting steel scrap at AED 1,335-1,340/t ($360-$362/t).

Billet market update

In the UAE, billet prices have risen following October deals at $515-520/t CPT, with suppliers now targeting $525-528/t exw.

Iranian-origin billet offers to the UAE have dropped by $3-5/t this week to $470-480/t CFR, equivalent to $458-460/t FOB. However, gas shortages in Iran are expected to push prices to $463-465/t FOB in the next two weeks.

A UAE rebar producer secured 5,000 t of ex-Oman billets at $510-512/t delivered. With the UAE's conformity regulation effective from 27 November, billet buyers are stocking up for December to meet rising rebar demand. Omani company Jindal Shadeed, the UAE's second-largest rebar supplier, has received its ECAS certificate for rebar and billets.

The company also supplies wire rods to the UAE.

Export market: UAE scrap prices are becoming less attractive to Pakistani buyers, as they are $8-10/t higher than offers from the UK, making it difficult for buyers to purchase at such a high price.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap remained stable at approximately $33-34/t. Imported HMS prices for CFR west coast India declined to $370/t, while UAE processed HMS prices stood at $336/t DAP.

Outlook

Industry experts feel domestic ferrous scrap prices will remain stable or range-bound in the coming weeks, with steel mills likely to increase scrap purchases in the final quarter due to rising rebar demand. Meanwhile, the export outlook appears sluggish as domestic steelmakers push for stronger scrutiny of illegal scrap exports from the UAE to India.