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UAE: Domestic scrap index uptrend continues, rises $7/t w-o-w amid strong rebar demand

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Melting Scrap

BigMint Bureau

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15 Nov 2024, 19:51 IST

UAE: Domestic scrap index uptrend continues, rises $7/t w-o-w amid strong rebar demand

Domestic shredded scrap demand weakens

UAE export offers persist amid surplus

Prices of processed HMS (80:20) scrap in the UAE have gone up, as demand from key export markets like India and Pakistan has been strengthening recently.

As per a Sharjah-based supplier, HMS processed was offered at AED 1,260-1,270/t ($343-346/t), but shredded scrap demand dropped significantly, with limited buyers, mainly EMsteel using local shredded material. Offers for shredded ranged from AED 1,280-1,290/t ($349-351/t), while buy-side estimates stood at AED 1,265-1,270/t ($344-346/t).

BigMint's bi-weekly assessment stood at AED 1,261/t ($343/t) for HMS (80:20) processed scrap, indicating a rise of AED 26/t ($7/t) w-o-w. Prices have been up-trending for a week now.

As per BigMint's week 46 market survey, around 4,500-5,000 t of scrap were sold at AED 1,250-1,300/t ($340-354/t) including 2,500-3,000 t of HMS (80:20) processed at AED 1,250-1,260/t ($340-343/t) and around 1,500-2,000 t of shredded at AED 1,285-1,300/t ($350-354/t) on a DAP Abu Dhabi basis.

Another supplier said that limited demand persisted during the week and the price of unprocessed HMS was at AED 1,180-1,200/t($321-327/t) and PNS levels were at AED 1,270-1,280/t ($346-349/t).

Rebar demand in the UAE remains strong, benefiting both local and regional suppliers. However, with limited export opportunities outside the GCC, some suppliers have had to rely more on domestic buyers, which has led to an imbalance between supply and demand. Current rebar consumption in the UAE is estimated at 290,000-300,000 t. As a result, prices have risen by AED 50-80/t ($14-22/t), with deals now falling between AED 2,200-2,250/t ($599-613/t) delivered. Retail prices for secondary mills' rebar are AED 2,320/t ($632/t), while prime material is priced at AED 2,440/t ($664/t).

The UAE is setting up a steel pipe bending plant in the Khalifa Economic Zones Abu Dhabi (KEZAD) as part of the "Make it in the Emirates" initiative.

Pipetec Solutions Manufacturing has secured a 50-year land lease for the AED 100 million ($27.2 million) project, covering 18,000 sq m. The plant will focus on hot induction bending for pipes from 4-80 inches, serving industries like oil and gas, construction, and aerospace.

Export momentum persists

The UAE's surplus scrap, which exceeds local mill demand, continues to drive export activity. Recently, UAE-origin fabrication scrap was offered at $402/t, while HMS 1 was priced at $388-390/t CFR Qasim. Additionally, around 700-800 tonnes of HMS mix PNS scrap were sold at $400/t CFR Chattogram, reflecting the ongoing export momentum.

If imports from the UAE to India are halted, Indian buyers will likely turn to other sources, such as the US, UK, Australia, and New Zealand, driving up prices.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap narrowed to approximately $22-24/t. Imported HMS prices for CFR west coast India declined to $365/t, while UAE processed HMS prices rose to $343/t DAP.

Outlook

UAE steel mills are expected to increase scrap purchases as rebar demand strengthens. In the coming weeks, major mills are likely to resume buying at higher prices. In the export market, offers are anticipated to soften in line with global trends.