UAE: Domestic scrap prices rebound by over $15/t w-o-w amid better inquiries from steelmakers

• UAE scrap prices rise following new rebar offers from Emirates Steel Arkan
  
  
• Comparatively better demand in the construction sector is expected to support rebar sales
  
  

This week, domestic scrap prices in the UAE recovered by $18-20/tonne (AED 70-75/t) post rebar offer price declaration from a major steelmaker.

As per buyer sources, HMS sheared interested price levels are at AED 1,270-1,290/t, shredded at AED 1,380-1,390/t, and HMS super at AED 1,240-1250/t DAP Abu Dhabi. Mill-delivered prices are at AED 1,450-1470/t for shredded and AED 1,340-1360/t for sheared/processed HMS.

According to a representative from a major trading house, "Our prices are higher than the domestic market because we offer premium materials due to material quality. However, market sentiments in UAE are currently weak following the recent drop in Emirates rebar prices."

Market survey: According to BigMint's week 22 market survey, shredded scrap bids and workable prices ranged from AED 1,430-1,440/t ($389-392/t), while HMS (80:20) processed was assessed at AED 1,330-1,350/t ($362-368/t) DAP Abu Dhabi.

As per market participants, around 4,000-5,000 t of HMS processed (sheared) were at AED 1380-1400/t, DAP and 1,500-2,000 t of shredded scrap at AED 1460-1480/t, DAP.

According to a domestic scrap supplier, local mills, including Arabian Gulf and Emirates Steel, are paying premiums of AED 25/t above market prices for delivered materials. Processed HMS is ready to be delivered at AED 1375-1400/t, and shredded scrap is at AED 1450-1475/t DAP. Due to a slightly tight supply in the domestic market, mills are willing to pay these premiums to secure higher-quality materials.

BigMint's bi-weekly assessment showed an AED 70/t ($19/t) decline for HMS (80:20) processed grade, which maintained a price range of AED 1,325-1,330/t ($361-362/t) DAP.

Exports are continuing as usual, with no hold on shipments. However, domestic scrap prices are highly fluctuating and may recover to AED 1,350-1,360/t this week if major mills resume procurement.

According to a supplier from Sharjah, the last bids received were AED 1,280/t for processed HMS and $1,380-1,400/t for PNS/shredded scrap. This week, we expect increased activity from mills, potentially pushing new offers to over AED 1,300/t, an increase of AED 50-60/t.

HMS spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap decreased to $38-40/t, following the comparatively upward trend in domestic HMS (80:20) processed price in UAE. Imported HMS (80:20) prices (CFR west coast India) hovered at $395-400/t, while UAE HMS (80:20) processed prices were at $360-363/t DAP.

Export market updates: In the scrap export market, indicatives for India in the HMS mix were mainly at $408-412/t CFR Nhava Sheva, followed by UAE HMS and PNS mix scrap at $410-412/t CFR Qasim basis. Additionally, 1000 t of PNS-HMS mix and 100 t of PNS from the UAE were sold at $415/t and $430/t respectively on a CFR Chattogram basis.

Conares, a prominent UAE steel re-roller, has expanded its market presence by venturing into the wire rod segment, complementing its existing operations in rebar, pipe manufacturing, and colour-coating. The new wire rod facility, designed for an annual capacity of 500,000 t, initially targets monthly production between 25,000 to 40,000 t, adaptable based on market conditions and demand dynamics.

The UAE's wire rod market, currently demanding 18,000 to 20,000 t monthly, is competitive with existing players like Emirates Steel Arkan and other sources, including imports. Despite this, Conares aims to carve a niche, leveraging its flexible production capabilities and established market network.

Meanwhile, regional competitor Jindal Shadeed, based in Oman, has also launched wire rod production with a similar capacity, acquired from Sohar Steel. This development intensifies competition, prompting Conares to consider international markets for growth opportunities.

With a strategic vision to expand its total capacity to 3 million tonnes (mnt) by 2030, including enhanced export capabilities, Conares remains committed to consolidating its position as a leading steel manufacturer in the Middle East.

Outlook: The UAE scrap market is set for a rebound, driven by expected increased procurement from steel mills. After a significant drop in rebar prices, demand for rebar and other steel products is expected to rise with better market activity in the near term.