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

In the United Arab Emirates (UAE), domestic scrap prices remained stable this week, displaying a largely unchanged trend with minor increases.

SteelMint's biweekly assessment reported a minimum increment of AED 5/tonne for HMS (80:20) processed scrap, maintaining a price of AED 1,300/t ($354/t) DAP.

Abu Dhabi-based mills did not conclude any major deals during the first week of 2024, but smaller transactions occurred, such as 25-30 tonnes of rebar scrap sold for AED 1,260/t, DAP Sharjah, and 20-25 tonnes of fabrication scrap purchased for AED 1,250/t, DAP Sharjah.

According to SteelMint's 2024 first-week market survey, no major deals were concluded by Abu Dhabi-based mills. However, small deals like 25-30 t rebar scrap sold for AED 1,260/t, DAP Sharjah, and 20-25 t fabrication scrap was bought for AED 1,250/t, DAP Sharjah.

Whereas, unconfirmed deals heard involving shredded scrap were heard at AED 1,400-1,430/t on a DAP basis.

As per market sources, the DAP price for scrap remained at the same level, and if some people require they are paying more as availability is low.

Buyer and seller indications: The UAE scrap market witnessed sellers quoting AED 1,330-1,350/t for PNS, AED 1,310-1,330/t for processed HMS (80:20), and AED 1,440/t for shredded scrap on a DAP Abu Dhabi basis. Conversely, buying indications suggest HMS super/unprocessed grade valued at around AED 1,200-1,210/t, while processed HMS is observed in the range of AED 1,290-1,300/t.

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 stable at around $36-42/t, reflecting an unchanged price trend in domestic scrap prices. Imported HMS (80:20) prices CFR West Coast India stayed steady at around $395-400/t, while UAE HMS (80:20) processed scrap prices remained at around $354/t DAP.

According to market sources, recent deals include around 1,000 t of HMS(80:20) sold at $425/t on a CFR Chattogram basis and approximately 1,000 t of shredded scrap were booked by a Pakistan-based mill at $435/t on a CFR Qasim basis. These transactions indicate that the scrap export market for South Asian countries is experiencing a nominal volume compared to earlier months.

Recent updates-

Arada, a UAE-based developer, has acquired a land plot in Zabeel 2, near Dubai International Financial Centre, for USD 163.37 million, intending to build a luxury residential project. The 50-floor residential tower will consist of 400 apartments, with design work already underway.

Excel Astra, a leading UAE-based construction contractor, signed a 50-year lease agreement with Khalifa Economic Zones Abu Dhabi (KEZAD Group) to establish a fabrication facility in KEZAD. The USD 5.4 million investment spans 45,000 square metres and is expected to create 400 job opportunities, with an annual sales potential exceeding USD 54 million. The facility aims to procure AED 80 million worth of goods and services annually from the local market.

National Building and Marketing Co. has launched Arab Steel Trading Company, a newly formed subsidiary, following approvals from authorities. Headquartered in Riyadh, the wholly-owned subsidiary will begin operations with SAR 500,000 (USD 133,315) in the capital. It will focus on scrap, metal, and waste recycling, expanding the parent company's activities. National Building and Marketing Co. specialises in wholesale and retail trade, covering building materials, rebar, timber, industrial and electronic equipment, medical supplies, construction, and general contracting services. Additionally, the company owns Ajeej Steel, an induction furnace-based billet producer with an annual capacity of 150,000 t.

Outlook: The anticipated scarcity of material flow is expected to keep domestic scrap prices firm in the UAE in near terms. The market foresees a shortage due to increased export volumes to South Asian countries, driven by the absence of European sellers amid the Red Sea incident and disruptions in the Suez Canal route.