UAE: Domestic ferrous scrap prices largely stable w-o-w; sluggish scrap demand weighs on fresh trades
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This week, domestic scrap prices in the UAE remained slightly upward as the markets for the same was sluggish with nominal deals seen from steel mills amid ample inventory levels. Prices were more or less stable, rising a marginal AED 3/t ($1/t).
BigMint's bi-weekly assessment shows an increase of AED 3/t ($1/t) for HMS (80:20) processed, with prices in a range of AED 1,342-1,344/t ($365-366/t) DAP Abu Dhabi.
According to an official with a major trading house, unprocessed HMS (80:20) was offered at AED 1,300-1,310/t while processed varieties were quoted at AED 1,340-1,350/t DAP.
BigMint's market survey for week 27 witnessed bookings of 3,000-4,000 tonnes (t) of ferrous scrap. These included HMS sheared/HMS (80:20) processed in a range of AED 1,330-1,340/t, PNS at AED 1,350/t and shredded, at AED 1,450/t, DAP Abu Dhabi.
An official from a major steel mill said, prices dropped as compared to last week amid limited requirements from the mill-side.
"Indicative mill prices show HMS processed at approximately AED 1,380/t, shredded at AED 1,480/t in Abu Dhabi. In contrast, current market prices indicate HMS processed at AED 1,320-1,340/t and shredded at AED 1,430-1,440/t
HMS spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap decreased to $24-25/t following an increase in the latter. Imported HMS (80:20) prices (CFR west coast of India) hovered at $390/t, while UAE HMS (80:20) processed prices were at $366/t DAP.
In the export market, Bangladesh buyers were active ahead of the onset of the monsoon, inquiring for UAE and Australian materials. Workable levels of UAE-origin HMS and PNS mix prices were heard at $425-428/t.
Emirates Steel Arkan: The UAE's Emirates Steel Arkan has maintained its rebar prices for July production. The prices are at AED 2,369 ($645)/t exw, and AED 2,377 ($647/t) CPT Abu Dhabi. , and For CPT Dubai, Sharjah, and northern Emirates, excluding 5% VAT, the rate is AED 2,384/t ($649/t).
Formed from the 2021 merger of Emirates Steel and Arkan Building Materials, Emirates Steel Arkan, majority-owned by Abu Dhab-based holding company ADQ, has an annual steel production capacity of 3.5 million tonnes.
The UAE HRC market is active again after a holiday break, with buyers and sellers trying to gauge future price trends amid global instability. A Chinese mill finalised deals at $555-560/t CFR as the base price, with tube makers paying $560/t CFR. Indian mills may return to the UAE market at the end of July. Japanese suppliers are currently inactive. Factors such as strong Chinese futures, anticipated ministry meetings, and Nippon Steel's scheduled maintenance could stabilise prices, but the market remains unpredictable.
Outlook
The UAE's scrap market is expected to hover within a narrow range at slightly lower levels due to a sluggish response from steel mills. This could pressure suppliers to export their materials overseas.
