UAE: Domestic ferrous scrap prices fluctuate w-o-w amid moderate trades

In the United Arab Emirates (UAE), scrap prices in the domestic market have witnessed a volatile trend this week, with moderate trade activities seen in the market. SteelMint's biweekly assessment showed an AED 5-10/tonne (t) uptick for HMS (80:20) processed scrap grade, maintaining a price range of AED 1,285-1,290/t ($350-351/t) DAP.

According to SteelMint's Week 50 market survey, a couple of deals were concluded by an Abu Dhabi base mill. Around 2,000 t PNS were booked at AED 1300/t DAP Abu Dhabi and 2,000 t of shredded scrap were booked at AED 1430/t on a DAP basis

On the other hand, a few sellers quoted AED 1,330-1340/t for PNS, AED 1310-1320/t for processed HMS (80:20), and AED 1,450-1460/t for shredded scrap on a DAP Abu Dhabi basis.

However, buyer indications suggest that HMS super/unprocessed workable scrap is valued at around AED 1,200-1,225/t, whereas processed HMS is observed in the range of AED 1,250-1,270/t.

As per a few traders, demand is good due to Pakistani buyers having better inquiries in the UAE market and pitching higher offers to acquire materials because of quick shipments.

HMS (80:20) spread: The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap prices in the current week remained at around $48-50/t, witnessing stability amid a range-bound trend in domestic scrap prices. Imported HMS (80:20) prices into the Indian West Coast increased to around $398-400/t, while UAE HMS (80:20) processed-grade scrap prices remained at around $350-351/t DAP.

Market insiders indicate that the current steel scrap consumption in the UAE's local market stands at approximately 110,000-120,000 t per month. This figure is projected to increase to around 145,000-150,000 t per month by H2 CY24, driven by investments in steelmaking capacity and scrap acquisition in the UAE.

Arabian Gulf Steel Industries (AGSI), a leading steel producer in the UAE, is set to boost its monthly scrap consumption to 55,000-60,000 t by the next year. Further expansion plans include the consideration of a new melt shop, anticipating a monthly consumption of around 90,000-100,000 t, with potential operations starting by late 2024 or early 2025. With an existing annual capacity of 400,000 t of semi-finished steel, AGSI's expansion positions it as a key player in scrap acquisition, potentially surpassing Emirates Steel Arkan, primarily a consumer of direct-reduced iron (DRI).

EBS secures $9.25 million contract: Dubai Investments' subsidiary and a leading steel structure manufacturer in the Middle East, Emirates Building Systems (EBS), has clinched a $9.25 million contract to construct two aircraft hangars at Abu Dhabi Airport. With a portfolio of successful airport projects, EBS will utilize 3,000 t of steel, adhering to aviation industry standards, and aims to complete the project by early 2024.

Outlook: The domestic scrap market of UAE is expected to remain firm in terms of prices, with tight supply in the finished longs sector from major mills amid better movement in the construction sector.