UAE: Domestic scrap prices up by $12/t w-o-w amid short-term shortage due to supply constraints

This week, scrap prices in the UAE witnessed a sharp hike of $12/t (AED 45/t) along with a relatively moderate market during the ongoing Ramadan weeks.

The upward movement was primarily influenced by Ramadan's shortened working schedule which has also led to a drop in incoming scrap volumes, creating a local market shortage. With the UAE relying solely on domestic scrap generation, the supply deficit has intensified. Despite this, demand for steel remains steady, with rebar prices unchanged. Mills continued to buy scrap, despite the price increase.

As per a few market sources, ferrous scrap prices have seen a slight increase in the past week due to the decreased scrap supply during the Islamic holy month.

However, a few deals heard in the market remained in the range of AED 1,240-1,250/t ($337-340/t) for HMS (80:20) processed on a DAP basis. Overall, buyers are involved in smaller purchases during Ramadan, anticipating a fluctuating market ahead, followed by low to moderate availability of scrap in inventories.

Market survey: According to BigMint's week 12 market survey, shredded scrap bids and workable prices ranged from AED 1,350-1,380/t ($368-376/t), while HMS (80:20) processed was assessed at AED 1,250-1,260/t ($340-343/t) DAP Abu Dhabi. Abu Dhabi-based mills have purchased around 3,000 t of domestic scrap so far, with prices ranging from AED 1,250-1,260/t ($340-343/t) (HMS sheared/processed).

BigMint's bi-weekly assessment showed an AED 40-45/t ($12/t) drop for HMS (80:20) processed scrap grade, maintaining a price range of AED 1,250/t ($340/t) DAP.

According to a supplier in Sharjah, the last day saw a purchase of AED 1250/t for HMS processed, totalling approximately 150-200 t. However, there remains a shortage of materials, persisting from the previous month. Consequently, purchases were necessary to fill containers, although the quantity acquired remains less than that of the previous month.

HMS (80:20) spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap declined to $40-45/t, following the slight recovery trend in domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained slightly downward at $375-380/t, while UAE HMS (80:20) processed scrap prices remained at $338-340/t DAP.

Emirates Steel Arkan, the UAE's leading steel producer, has rolled over its rebar offers for a second consecutive month for April deliveries, sources informed BigMint. Current offers stood unchanged at around $750/t exw (AED 2,755/t). The company has decided to keep offers unchanged amid bearish global price trends and lukewarm demand.

In the scrap export market, indicatives for Bangladesh in HMS 1 and PNS mix were mainly at $425-428/t CFR Chattogram, followed by PNS scrap at $420-425/t CFR Qasim basis. Additionally, 500 t of HMS/PNS mix sold for $418/t on a CFR Chattogram basis.

Outlook: Domestic scrap prices in the UAE are anticipated to maintain a slightly elevated position. Despite this, steel demand has shown resilience, with moderate market activities expected in the near term.