UAE: Ferrous scrap prices fall by over $5/t w-o-w; market turning active post-Eid

The domestic ferrous scrap market in the UAE witnessed a declining trend as prices stood at AED 1,310-1,330/t (357-362/t) for HMS (80:20) processed and AED 1420-1430/t for shredded due to mills soft-pedaling on operations during the Eid week. As per market participants, the market's direction will become clearer next Monday after the holiday period.

A trader source said that the UAE market remains weak and has not fully picked up post the the Eid holidays. Although mill activities are ongoing, they are progressing at a slow pace.

Market survey: According to BigMint's week 25 survey, approximately 3,000-4,000 t of processed HMS were booked at AED 1,350-1,360/t DAP Abu Dhabi. Additionally, 4,000-5,000 t of shredded scrap were booked at AED 1,475-1,480/t DAP Abu Dhabi.

According to a representative from a major trading house, deals heard towards the weekend for HMS (80:20) have been reported at AED 1,400/t, shredded scrap at AED 1,500/t, and end-cutting scrap at AED 1,500/t. Post-Eid, demand is expected to rise with increased volumes next week.

BigMint's bi-weekly assessment declined by AED 20/t ($5/t) for HMS (80:20) processed, maintaining a price range of AED 1,315-1,320/t ($358-359/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 remained range-bound at $32-33/t, following the comparative trend of decline in domestic HMS (80:20) processed prices in the UAE. Imported HMS (80:20) prices (CFR west coast India) hovered at $394-397/t, while UAE HMS (80:20) processed prices were at $358-360/t DAP.

Export market activities: A Sharjah-based scrap supplier sold the last shipment from the UAE of 100 t (four containers of mixed HMS and PNS) for $415/ CFR Chattogram. Bangladeshi buyers find a better profit margin when procuring UAE (Dubai) material. As per market participants, before BDT depreciation, it took seven days to open an LC. Recently, LC openings have been delayed due to depreciation issues. Post budget, action was taken to balance remittance flow and inflation. Around 1,000 t of HMS-PNS mix from the UAE to Chattogram is under negotiation for $420-425/t CFR Chattogram.

No major deals are expected this week from the UAE to Pakistan and Bangladesh amid after effect of Eid holidays. Indicatives from the UAE shredded and HMS-PNS mix was heard at around $422/t and $418-420/t CFR Qasim respectively.

Emarat Dzayer Steel project update: The Algerian-Emirati joint venture, Emarat Dzayer Steel, aimed at reducing steel imports and meeting local demand, remains stagnant. Owned by UAE's Emarat Dzayer Group (49%) and Algeria's IMETAL Group (51%), the EURO 1.2 billion project has seen no capacity development progress. Originally planned with 30% equity and 70% bank financing, the project has been facing financial issues since 2018, leading to the current impasse.

The project, which initially included phases for seamless pipes, merchant bars, and galvanising, has not advanced beyond the planning stages. Algeria, burdened by the stalled venture, is exploring termination of the UAE partnership and seeking new collaborations, possibly with China, to revive the project.

As the project remains on hold, Algeria continues to rely on imports of steel products, highlighting missed opportunities for local production and economic growth.

Outlook: The UAE's domestic scrap market is expected to be active next week following the Eid break, with mills resuming regular procurement. Market insiders anticipate that post Eid, demand in the export market is also expected to rise leading to higher volumes and export prices for scrap in Pakistan and Bangladesh may rise by $10-15/t.