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 prices drop over $10/t w-o-w amid uncertain outlook

...

Melting Scrap

BigMint Bureau

407 Reads

16 Feb 2024, 19:24 IST

UAE: Domestic ferrous scrap prices drop over $10/t w-o-w amid uncertain outlook

This week, UAE domestic scrap prices continued to witness a decline with minimal activity following an uncertain week post-export duties imposition on ferrous scrap exports.

BigMint's bi-weekly assessment reported a sharp decline of AED 42/tonne ($11/t) for HMS (80:20) processed scrap, maintaining the price at AED 1,228/t ($334/t) on DAP Abu Dhabi.

The imposition of duties on ferrous scrap exports is significantly influencing domestic scrap prices. For instance, the domestic processed HMS (80:20) scrap index experienced a notable decline of approximately AED 100/t ($27/t) since 1 February, 2024, leading to a significant impact on major exporting activities in Sharjah and other regions of the UAE.

A representative from a major mill said, "From the mill side, no new purchase order was issued, whereas the local containers from Dubai were heard at AED 1220/t."

A scrap exporter based in Sharjah said, "Current market trend is not supportive for exporters, we are getting bids for HMS processed at AED 1,200/t and unprocessed HMS heard at AED 1,120-1,140/t."

In BigMint's Week 7 market survey, sluggish activities were observed, with a nominal volume of approximately 3,000-4,000 t of mixed scrap grades priced at AED 1,200-1,380/t, covering HMS processed and shredded scrap on a DAP Abu Dhabi basis.

Regarding buyer and seller indications, sellers in the UAE scrap market quoted prices ranging from AED 1,260-1,300/t for processed HMS (80:20) and AED 1,380-1,400/t for shredded on a DAP Abu Dhabi basis. Conversely, buying indications suggested HMS super/unprocessed grade valued at around AED 1,150-1,160/t, while processed HMS was observed in the range of AED 1,190-1,200/t.

According to a local mill-side buyer, "The loading price for local container unprocessed HMS (80:20) was at AED 1,100/t local ex-yard in Abu Dhabi."

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 significant increase, reaching approximately $52-54/t, following the downward trend in domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained slightly downward at $388-395/t, while UAE HMS (80:20) processed scrap prices remained at $334-335/t DAP.

In the scrap export market survey, no major activities were recorded, indicative of Bangladesh in HMS 1 and PNS mix at $438-440/t on a CFR Chattogram basis. A shredded deal is heard to be under discussion at $450/t. Currently, UAE shipments are also affected due to duties as per a few exporters.

An official from a major trading house stated, "It seems that after the UAE, Saudi Arabia has also put a 5% duty on exports of scrap metals. It will be difficult for Asian scrap buyers to tackle this export duty wave."

As per a Pakistani steel mill representative, "Fabrication offers we heard were at $440/t, and HMS 1 and PNS mix scrap offers were at $415-420/t on a CFR Qasim basis."

Outlook: It's conceivable that Pakistani buyers could secure some volumes due to a shortage in raw materials, albeit at a slower pace. Domestic ferrous scrap prices may continue to decline until exporters settle on a suitable price to accommodate the export duty in their transactions. Following this adjustment, the price trend could potentially shift upward in the coming months.