UAE: Domestic ferrous scrap prices edge up w-o-w amid firm global scrap offers

In the United Arab Emirates (UAE), there was a slight uptick in local scrap prices 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 30-35/tonne (t), holding within a price range of AED 1,180-1,200/t ($321-327/t) on a DAP basis.

Increased domestic demand for scrap in the UAE, coupled with elevated bids from buyers, prompted local recyclers to sell at slightly higher prices. This was influenced by active market activities in South Asia and Turkiye, where higher offers and increased trade volumes set the precedent for local scrap recyclers to quote elevated prices. Importers are also willing to pay a premium due to the rise in scrap prices in major global markets.

In SteelMint's week 45 market survey, it was reported that a steel mill based in Abu Dhabi, UAE, acquired 4,000 tonnes of PNS scrap at AED 1,275/t, with delivery to the plant scheduled for the entire week. Furthermore, 500 t of PNS (2×4) was ordered at AED 1300/t with extra VAT on a DAP basis in Abu Dhabi.

A Sharjah-based trader reported, "Prices have edged up by approximately AED 10-30/t, primarily driven by demand from overseas markets such as Pakistan. Higher offerings from international buyers have contributed to making the scrap more expensive compared to last week."

Shredded scrap prices are currently in the range of AED 1,325-1,350/t, while PNS-grade scrap is hovering around AED 1,280-1,300/t after reaching AED 1,250/t the previous week.

An Abu Dhabi-based mill source mentioned, "There are reports of increasing prices, and the global momentum in scrap prices has shown a significant upward swing." The current offer for HMS sheared/processed scrap is in the range of AED 1,200-1,225/t, while shredded scrap is available at AED 1,325-1,350/t on a DAP basis. Additionally, PNS scrap can be obtained at AED 1,300/t on a DAP Abu Dhabi basis.

Market participants noted that rebar prices in the UAE remained stable this week, with most mills offering prices at AED 2,550-2,600/t EXW. This is consistent with the previous week's prices. Market insiders are expecting prices to remain volatile in the coming weeks, as mills and traders try to balance supply and demand.

Abu Dhabi-based Emirates Steel Arkan, the UAE's largest steel and building materials manufacturer, reported strong performance in the first nine months of 2023 with AED 6.48 billion in revenues and a net profit of AED 387.6 million despite global headwinds.

Strong demand from the UAE's construction sector, stable margins amid a dip in global prices, and continuing increase in the manufacture and sale of value-added products for both the domestic and export markets have resulted in a third-quarter net profit of AED 107.1 million.

Overall, the outlook for the UAE steel market is positive, with prices expected to remain stable or even increase slightly in the coming weeks.