UAE: Domestic scrap prices rise by $4/t w-o-w; dull activities amid bad weather and export trends

• Export activity pushes up domestic prices.
  
  
• Bad weather disrupted domestic scrap movement.
  
  

This week, scrap prices in the UAE surged by $4/tonne (AED 16/t) despite a sluggish market, partly due to recent rains and thunderstorms that disrupted domestic scrap movements in major regions, particularly Abu Dhabi and Dubai. Additionally, better export activities kept domestic scrap trades relatively slow.

According to market sources, there is an expectation of a decrease in rebar prices this month, pending an announcement from Emirates Arkan. While mills have slightly increased scrap prices, fabrication is available at AED 1,300/t and end-cuts of rebar at AED 1350/t.

As per buyer sources, PNS and HMS sheared interested price levels are at AED 1,250-1,255/t, shredded at AED 1,325-1,330/t, and HMS super at AED 1,220/t DAP Abu Dhabi. Mill-delivered prices are AED 1,420/t for shredded and AED 1,300/t for sheared HMS. Exports have contributed to pushing up domestic prices.

BigMint's bi-weekly assessment showed an AED 16/t ($4/t) rise for HMS (80:20) processed scrap grade, maintaining a price range of AED 1,270-1271/t ($346/t) DAP.

Market survey: According to BigMint's week 16 market survey, shredded scrap bids and workable prices ranged from AED 1,360-1,380/t ($370-376/t), while HMS (80:20) processed was assessed at AED 1,260-1,270/t ($343-346/t) DAP Abu Dhabi.

HMS spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap widened to $55-57/t, following the sharp rise in Indian imported HMS scrap prices from Europe. Imported HMS (80:20) prices (CFR west coast India) increased to $400-402/t, while UAE HMS (80:20) processed scrap prices were at $345-346/t DAP.

According to a supplier in Sharjah, exports were ongoing during the last week, with less stringent customs compared to the previous month. With strong demand from Pakistan and Bangladesh, we had an inquiry at $418-422/t for the PNS mix. Shredded scrap from UAE is offered at $425/t for Pakistan and over $428/t for Bangladesh.

Export offers for Bangladesh and Pakistan: Indicative prices for HMS 1 and PNS mix ranged from $425-428/t CFR Chattogram, with PNS scrap at $428-430/t CFR Qasim. Fabrication scrap was offered at $424/t and HMS sheared was offered at $405/t, HMS was offered at $395/t. Shredded offers were heard at $430-435/t CFR Chattogram.

Arada awards contracts worth AED 615 millions ($168 million) for the construction of 565 homes in Azalea, the fourth phase of the AED 9.5 billion ($2.6 billion) Masaar project in Sharjah's Suyoh district. Saleh Construction and Yanal Building Contracting Company will build 324 and 241 homes, respectively. The Masaar project comprises 3,000 villas and townhouses across six phases, featuring a 'green spine' of 70,000 trees. Currently, 1,500 homes in the second, third, and fourth phases are under construction, with the first phase of 430 homes completed by 2023's end. Contracts for the remaining phases will be awarded in Q2, targeting project completion by 2026.

Outlook: The scrap market in the UAE is expected to rise, with a workable price of nearly AED 1,275-1,280/t for HMS processed and AED 1,380-1,400/t for shredded on DAP basis. The rebar market is expected to continue to see some drops in the near term.