UAE: Domestic ferrous scrap market witnesses slow activity and slight price increase w-o-w

The United Arab Emirates (UAE) local scrap prices continue with a slight uptick in the domestic ferrous scrap market this week. SteelMint's biweekly assessment indicates that the HMS (80:20) processed scrap grade experienced an increase of AED 25-30/tonne (t), holding within a price range of AED 1,220-1,230/t ($332-335/t) on a DAP basis.

In SteelMint's week 46 market survey, there were minimal volume deals reported as mills displayed reluctance to procure materials at elevated costs.

A Sharjah-based trader reported, "There is less material in the market, so price expectations are up. UAE steel mills are concerned about the rising price of scrap, as this is putting upward pressure on their production costs."

The constrained availability of scrap in the market is contributing to an optimistic outlook on prices. Shredded scrap prices are holding steady within the range of AED 1,330-1,360/t, while PNS-grade scrap is maintaining a range of AED 1,270-1,280/t. There are indications suggesting that HMS super/unprocessed workable scrap is valued at around AED 1,100/t, whereas processed HMS is observed in the range of AED 1,230-1,240/t. However, activities in this segment are sluggish, with potential buyers expressing interest at AED 1,190-1,200/t for HMS (80:20) processed and AED 1,260-1,270/t for PNS processed grade.

Rebar price sentiments in the UAE for the week are mixed. Some market participants anticipate stable prices, while others foresee the potential for a slight increase.

Industry Development-
Emirates, the world's largest international airline, announced a significant US$950 million investment to construct a new ultra-modern engineering facility at Dubai World Central (DWC). The construction of Emirates' new engineering facility at Dubai World Central (DWC) is expected to have a positive impact on the steel and rebar markets in the UAE. The construction of the new engineering facility is expected to begin in 2024 and be completed by 2027.

Outlook: The outlook for the UAE domestic scrap market remains range-bound, with prices expected to stay slightly higher. This is attributed to sustained elevated levels of raw material costs. Overall, the steel market sentiment in the UAE suggests a likelihood of slightly higher steel product prices in the coming weeks.