UAE: Domestic scrap index drops $8/t w-o-w; major mill rolls over rebar prices for Feb'25 production

• Limited buying activity, weak export market results in price drop
  
  
• EMsteel rebar prices stable for Feb'25 deliveries on firm demand
  
  

The UAE domestic ferrous scrap index declined by AED 32/t ($8/t) w-o-w. The domestic scrap market in the UAE has entered a sluggish phase, with prices witnessing a slight drop. Demand from major buyers remained subdued due to weaker exports and limited domestic buying activity.

BigMint's benchmark assessment for HMS (80:20) processed scrap was priced at AED 1,201/t ($327/t), reflecting a AED 32/t ($8/t) drop compared to last week's AED 1,233/t ($336/t).

Market scenario

Offers for HMS processed in the market were reported at AED 1,210-1,220/t ($329-332/t). However, bid levels from buyers fell short of these offers, leading to a price decline as buyers remained hesitant to engage in the market.

As per BigMint's Week 4 market survey, approximately 3,000-4,000 t of processed HMS (80:20) were sold at AED 1,190-1,220/t ($324-332/t) DAP Abu Dhabi.

Indicative offer levels for other scrap grades in the market were reported as follows: HMS (unprocessed) at AED 1,150-1,170/t ($313-318/t), fabrication scrap at AED 1,270-1,280/t ($345-348/t), and shredded scrap at AED 1,290-1,320/t ($351-353/t).

A source informed, " The UAE's domestic scrap demand, which was previously around 0.1-0.15 mnt per month, has now risen to 0.2-0.25 mnt per month, driven by new developments and increased consumption. The current dip in scrap demand appears temporary and is expected to rebound after the Ramadan season, a period typically marked by reduced working hours and labor shortages. "

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) from Europe and UAE local HMS (80:20) processed scrap increased to approximately $26-28/t from $18-20/t a week ago. Imported HMS prices for CFR west coast of India stood at $355-356/t, while UAE processed HMS prices were at $327-330/t DAP Abu Dhabi.

Export market

Pakistan's market remained relatively quiet last week. Ten days ago, shredded scrap prices in the UAE had reached a peak of $410/t but have since softened to $397-400/t. Recently, a 500-t lot of shredded scrap was reportedly purchased from the UAE at $400/t CFR Qasim.

In Bangladesh, the market has remained relatively stable compared to last week's offers, though sentiment remains subdued due to limited activity and notable bid-offer disparities. Major mills, holding sufficient inventories, have shown restrained buying interest. Meanwhile, inquiries for UAE PNS were reported at $385-390/t CFR Chattogram.

UAE steel market updates

On 23 January 2025, EMsteel, the largest steel producer and market leader in the UAE, announced its rebar prices for February production, keeping them stable due to firm demand over the past month.

Prices are at AED 2,652/t ($722/t) ex-works, with Abu Dhabi offers at AED 2,658/t ($723/t) CPT and Dubai/Sharjah offers at AED 2,666/t ($725/t) CPT.

The UAE rebar sector is performing positively, with current consumption estimated at 0.39 million tonnes (mnt). However, tier-two producers are reportedly struggling to maintain market share, offering lower prices in the range of AED 2,270-2,300/t under 90-day LC payment terms to secure orders.

Meanwhile, imported hot-rolled coil (HRC) offers showed mixed trends w-o-w in the Middle East. HRC export offers from India to the Middle East dropped by $10/tonne (t) to $520-525/t CFR UAE from $530-535/t a week ago, as per BigMint's sources. Prices fell following a deal for around 15,000 t, which was heard to have concluded at around $520-525/t CFR UAE.

Meanwhile, Chinese HRC export offers to the Middle East rose $20-25/t to $505-515/t CFR UAE from $485-490/t in the previous week. This rise in offers can be attributed to the upcoming Lunar New Year holidays in China.

Outlook

Scrap demand is likely to stay subdued, with a sluggish export market adding downward pressure on prices. A potential price dip is anticipated around March/April, coinciding with the Ramadan period.