UAE ferrous scrap index drops AED 15/t ($4/t) w-o-w as pre-holiday stockpiles weigh on demand

• UAE export market slow amid Bangla LC issue, liquidity crunch in Pak
  
  
• Local UAE mills raise rebar offers on rise in consumption
  
  

The UAE's domestic ferrous scrap index decreased by AED 15/tonne (t) ($4/t) w-o-w. This price drop was driven by yard maintenance and sufficient year-end stock, resulting in no new orders being placed before the New Year.

BigMint's benchmark assessment for HMS (80:20) processed scrap fell to AED 1,200-1,210/t ($327-329/t), down from AED 1,220-1,230/t ($332-335/t) in the previous week.

Additionally, the offered price for processed HMS was AED 1,230-1,240/t, while those for shredded scrap were heard at AED 1,300-1,310/t ($353-356/t), DAP Abu Dhabi.

The current workable levels for HMS processed stand at AED 1,200-1,210/t ($326-329/t), while for shredded the levels stand at around AED 1,240-1,250/t ($337-340/t), DAP Abu Dhabi.

BigMint's Week 52 market survey reported minimal trade activity after 24 December, 2024. Earlier in the week, a 3,000-t HMS processed deal was concluded at AED 1,220-1,230/t ($332-335/t). However, prices dropped mid-week due to weak demand as buyers paused procurement. Inquiries for shredded scrap also remained limited for the week.

Export market

This week, the UAE's export market witnessed limited activity due to the usual year-end slowdown, ongoing LC issues in Bangladesh, and liquidity constraints in Pakistan's domestic market caused by year-end financial closures.

Pakistan's imported ferrous scrap market slowed as suppliers limited their offers due to year-end holiday closures and January bookings. In the initial part of the week, UAE-origin shredded scrap was offered at $400/t CFR for 500-t loads with 21 free days, while buyers countered at $390-395/t. HMS remained range-bound at $370-372/t CFR, with shredded at $393-398/t CFR.

Bangladesh's imported scrap market remained sluggish this week due to LC challenges and suspended government projects. Mills are facing 2.5-3 week LC approval delays and stricter financial controls, affecting liquidity. While larger mills are managing bulk purchases, smaller players are struggling to secure materials amid blocked accounts and restrictions on controversial banks.

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) from Europe and UAE local HMS (80:20) processed scrap increased to approximately $35-40/t. Imported HMS prices for CFR west coast of India stood at $360-370/t, while UAE processed HMS price levels fell to $327-329/t, DAP Abu Dhabi.

UAE steel market updates

Rebar market: Sources said that UAE-based Emsteel has raised its rebar prices for January due to higher local consumption. It was heard that monthly rebar consumption is currently at around 380,000 t/month (m). Emsteel's new price for January production is set at AED 2,652/t ($722/t) ex-works, an increase of AED 50/t ($13/t) compared to the December price of AED 2,602/t ($708/t), ex-works.

The decision to raise prices comes amid a positive outlook on the rebar market, with continued strong demand expected to extend into Q1CY'25. A major mill-side participant said, this sustained demand is largely driven by favourable market conditions, including rising international scrap prices, which have contributed to the upward pressure on steel tags.

HRC market: Indian HRC export offers to Emirati buyers remained stable w-o-w, at $540-545/t CFR UAE. Slow demand led to limited trade activities in the region due to year-end holidays. However, competitive Chinese offers remain a concern. Chinese HRC export offers dropped by $5/t w-o-w to $515-520/t CFR against $520-525/t CFR UAE in the previous week.

Outlook

Market activity is expected to accelerate in the New Year, with both prices and trade activities rising, fuelled by a predicted recovery in the property sector. This rebound is likely to spur greater demand for steel products, such as rebar, driven by increased construction and infrastructure projects.