UAE: Ferrous scrap prices drop over $15/t w-o-w on sluggish trade

This week, the UAE's domestic scrap prices continued to witness a further decline with sluggish activity following which suppliers faced a downward price trend from mills post-duty imposition on ferrous scrap exports.

As per a few supplier-side sources, currently, no one is paying export duty, and it has to go below AED 1,000/t. Currently, price drops are continuously being heard, allowing exporters to make profit if the restriction is not applied in a few ports. Unprocessed HMS scrap were ready to sell at AED 1,050-1,075/t and processed at AED 1,150-1,175/t DAP.

Major traders are currently lowering prices in anticipation of impending duties, although they have yet to pay these duties. Workable prices for shredded scrap range from AED 1,300-1,320/t, while HMS is priced at AED 1,175-1,200/t DAP.

There are reports of fines being imposed, and some containers have allegedly been detained at Jebel Ali port, contributing to market disturbance. However, there is speculation that this may be more due to peer and artificial pressure than actual incidents.

While there are rumours of hefty fines ranging from AED 50,000-100,000 per shipment, about 33 containers have reportedly been placed on hold. This has led to decreased export volumes, as exporters are hesitant due to the potential fines as per a few exporters.

A mill side source said, "Demand for HMS PNS mix is observed at AED 1,325/t DAP, while negotiations for shredded scrap are ongoing at 1,365-1,370 AED/t. Despite this, there are reports of HMS sheared being priced at AED 1,220-1,230/t DAP, with some suppliers seeking AED 1,250-1,265/t."

Exporters have approached suppliers to provide materials to mills in Abu Dhabi, indicating potential shifts in market dynamics. PNS sheared is priced at 1,250 AED/t plus delivered.

HMS (80:20) spread: The average spread between the CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap continued to increase significantly, reaching approximately $60-65/t, following the downward trend in domestic scrap prices. Imported HMS (80:20) prices, CFR west coast India, remained slightly downward at $390-392/t, while UAE HMS (80:20) processed scrap prices remained at $324-326/t DAP.

In the scrap export market survey, no active trades were recorded, indicative of Bangladesh in HMS 1 and PNS mix at $435-438/t on a CFR Chattogram basis. A turning boring deal is heard at $375/t with 250 t volume on a CFR Qasim basis followed by a 500 t HMS(80:20) deal concluded at $410/t on a CFR basis.

Emirates Steel Arkan: UAE's Emirates Steel Arkan (ESA) announced no change in July rebar prices, holding at AED 2,450 (USD 667)/t CPT Abu Dhabi and AED 2,458 (USD 669)/t CPT Dubai, excluding 5% VAT. The decision reflects subdued market activity ahead of the Eid holidays.

Additionally, Emirates Steel maintains March rebar offers at $750/t exw (AED 2,755/t), citing tepid demand and sluggish trading conditions.

Emirates Steel Arkan (ESA) has partnered with MAGSORT to drive sustainability at its Al Ain Cement Factory. This collaboration aims to reduce CO2 emissions by up to 15% by processing steel slag. ESA aims to lead the industry in achieving UAE LTS targets and decarbonisation goals. The initiative sets a precedent for green cement production and circular economy practices.

Outlook: The downward trend in domestic ferrous scrap prices may persist as mills are likely to adjust their purchase prices downward, potentially impacting suppliers' asking prices in the coming weeks.