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UAE: Domestic ferrous scrap prices drop over $15/t w-o-w post-export duty imposition

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Melting Scrap

BigMint Bureau

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9 Feb 2024, 20:50 IST

UAE: Domestic ferrous scrap prices drop over $15/t w-o-w post-export duty imposition

This week, the UAE domestic scrap market witnessed a notable decline, with uncertainty prevailing amid the imposition of export duties on ferrous scrap exports. In a knee-jerk reaction, domestic scrap prices fell over $15/tonne (t).

A representative from a major mill said, "There has been minimal purchasing activity this week, although prices for processed HMS and shredded scrap have dropped by AED 50/tonne thus far."

An official from a major trading house stated, "The market outlook is uncertain following the implementation of export duties, leading to the possibility of significant fluctuations in the near term."

A scrap exporter based in Sharjah said, "The Sharjah market heavily relies on exports, and due to the imposition of export duties, sellers are exploring domestic mills as alternative buyers for their material."

BigMint's bi-weekly assessment reported a sharp decline of AED 55-58/t ($15/t) for HMS (80:20) processed scrap, maintaining the price at AED 1,270/t ($346/t) DAP.

In BigMint's Week 6 market survey, moderate activities were observed, with a substantial volume of approximately 5,000-6,000 t of mixed scrap grades priced at AED 1,300-1,420/t, covering HMS processed and shredded scrap on DAP Abu Dhabi basis.

Regarding buyer and seller indications, sellers in the UAE scrap market quoted prices ranging from AED 1,300-1,310/t for processed HMS (80:20) and AED 1,400-1,420/t for shredded on DAP Abu Dhabi basis. Conversely, buying indications suggested HMS super/unprocessed grade valued at around AED 1,190-1,200/t, while processed HMS was observed in the range of AED 1,240-1,250/t.

According to a local mill-side buyer, "The loading price for local container HMS/PNS ranged from AED 1,180-1,220/t in certain regions in Abu Dhabi."

Another trade source mentioned, "Before the imposition of duties, processed HMS was offered at AED 1,350/t, and now it is priced at AED 1,300/t, with shredded scrap at AED 1,400/t, reflecting a decrease of AED 50/t from the previous month."

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 $50-51/t, following the downward trend in domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained stable at $395-400/t, while UAE HMS (80:20) processed scrap prices remained at $346-350/t DAP.

In the scrap export market survey, some activities were recorded, including a deal for Bangladesh, comprising 1,000 t of HMS 1 and PNS mix at $440/t on CFR Chattogram basis. The current indicative price for UAE-origin HMS 1 and PNS mix stands at $440-445/t on CFR Chattogram basis.

According to a major trading house in Bangladesh, "Recently, PNS from Dubai was booked at $435/t CFR Bangladesh, but the current situation following the imposition of export duties makes it somewhat challenging to secure a suitable price."

Outlook: Market participants expect a range-bound outlook for the upcoming week, particularly concerning prices. There's a likelihood of domestic mills lowering their purchase prices, as exporters are expected to provide sufficient materials to the domestic market following the imposition of export duties starting this week.