UAE: Domestic scrap prices increase by $14/t w-o-w; buyers cautious amid dull steel demand

• Demand expected to drop by 40% in near term
  
  
• Emirates Steel keeps rebar offers unchanged
  
  

This week, domestic scrap prices in the UAE surged by $14/tonne (AED 51/t) despite a slow-moving market. Concerns persisted about the impact of severe weather. Some construction sites remain closed due to flooding, which is likely to affect steel consumption. Market insiders expect demand to drop by around 35-40% in the coming days.

As per buyer sources, HMS sheared interested price levels are at AED 1,270-1,285/t, shredded at AED 1,335-1,340/t, and HMS super at AED 1,240/t DAP Abu Dhabi. Mill-delivered prices are at AED 1,420-1430/t for shredded and AED 1,310-1325/t for sheared/processed HMS.

BigMint's bi-weekly assessment showed an AED 51/t ($14/t) rise for HMS (80:20) processed grade, which maintained a price range of AED 1,320-1322/t ($359-360/t) DAP.

Market survey: According to BigMint's week 17 market survey, shredded scrap bids and workable prices ranged from AED 1,400-1,420/t ($381-387/t), while HMS (80:20) processed was assessed at AED 1,270-1,290/t ($346-351/t) DAP Abu Dhabi.

As per market participants, around 300-500 t end-cutting scrap got sold at AED 1,340/t exw. AED 1,310-1,330/t for HMS processed/sheared and AED 1,430-1,440/t for shredded are the current indicatives heard in the market.

As per a mill-side representative, no major purchasing was done this week, while production levels are under review against the backdrop of the current demand levels.

HMS spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap narrowed down to $44-45/t, following the comparatvely rising trend in Indian imported HMS prices from Europe. Imported HMS (80:20) prices (CFR west coast India) increased to $404-406/t, while UAE HMS (80:20) processed prices were at $360/t DAP.

According to a supplier in Sharjah, prices are going up but the market is not performing well.

Export offers for Bangladesh and Pakistan: No major demand from Pakistan and Bangladesh was seen with the last inquiry at $428-430/t for PNS mix. Shredded scrap from the UAE is being offered at $438-440/t and at $415/t for HMS(80:20) CFR Pakistan and shredded offers at over $440-442/t CFR Bangladesh.

Emirates Steel has kept its rebar offers unchanged for the third consecutive month, maintaining prices at about $750/t ex-works (AED 2,755/t). ESA's decision to hold prices steady caught some market participants off guard, especially after disruptions caused by the Eid holidays and record rainfall in the UAE and Oman, which led to closures and increased rebar inventories at traders' warehouses. ESA attributed its price stability to lukewarm demand caused by the holiday season slowdowns and weather-related interruptions in construction activities. Despite these challenges, the company has opted to maintain its prices for May shipments.

Emirates Steel Arkan (ESA) has been named a 2024 Steel Sustainability Champion by the World Steel Association, the only company in the Middle East and North Africa region to receive this honour. ESA's commitment to sustainability includes significant emission reductions and increased use of renewable energy. Its production process sets industry benchmarks, utilising 45% less carbon than the industry average, achieved through clean energy utilisation, scrap and recyclables utilization, and Carbon Capture, Utilization, and Storage (CCUS).

Outlook: The scrap market in the UAE is expected to remain range-bound, as the rebar and other steel demand in the market is expected to remain dull owing to a slow construction activity in the near term.