UAE's scrap index drops $2/t w-o-w amid softening export activities

• Demand remains sluggish as only a few mills remain active in purchases
  
  
• Spread between European and UAE HMS (80:20) widens to $30-32/t
  
  

The UAE domestic ferrous scrap index fell by AED 8/t ($2/t) w-o-w, as buying activity remained sluggish. Except for demand from one or two major mills, most market participants stayed inactive, further dampening domestic trade. Export activity also slowed, with weak inquiries from key buyers like Pakistan and other South Asian countries.

BigMint's benchmark assessment for HMS (80:20) processed scrap was priced at AED 1,193/t ($325/t), reflecting a AED 8/t ($2/t) drop compared to last week's AED 1,201/t ($327/t).

Among major mills, Emirates Steel (EMsteel) is not actively procuring scrap due to its reliance on DRI-based production, while AGSI remains a key buyer, usually sourcing around 40,000-45,000 t of ferrous scrap per month.

As per a few market participants, HMS (80:20) is now at AED 1,120-1,130/t, down AED 10-15/t w-o-w, while HMS processed has dropped to AED 1,180-1,195/t, lower by AED 15-20/t. Fabrication scrap stands at AED 1,230-1,240/t, down AED 15-25/t, and End-cutting has slipped to AED 1,265-1275/t, declining by AED 20-25/t.

As per BigMint's Week 5 market survey, approximately 5,000-6,000 t of processed HMS (80:20) were sold at AED 1,190-1,200/t ($324-327/t) DAP Abu Dhabi.

According to BigMint's market survey, current market rates for HMS unprocessed are AED 1,150-1,160/t, HMS processed at AED 1,190-1,200/t, shredded at AED 1,250-1,270/t, fabrication at AED 1,270-1,290/t, and UAE fabrication at AED 1,250/t. The price gap between HMS processed and unprocessed scrap remains at AED 40-50/t, reflecting the added value of size-cut material. HMS processed refers to scrap that has been cut into specific sizes for easier handling and melting.

Export market

Bangladesh's scrap market remains slightly active, with 1,500 t of UAE-origin Heavy PNS and Fabrication sold at $390/t CFR Chittagong, though its sustainability beyond Ramadan remains uncertain.

In Pakistan, UAE shredded is priced at $395/t CFR Qasim, while UAE fabrication saw limited trades, with two containers sold at $392/t CFR. Buyers remain cautious, monitoring market trends before making larger commitments.

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 $30-32/t from $25-26/t a week ago. Imported HMS prices for CFR west coast of India stood at $356-357/t, while UAE processed HMS prices were at $325-326/t DAP Abu Dhabi.

HRC market

Chinese HRC export offers to the Middle East remained stable w-o-w ahead of the Lunar New Year holidays in China. Offers held steady at $505/t CFR UAE, with a reported deal of approximately 5,000-7,000 (t) concluded within the range of $500-505/t CFR UAE.

Indian HRC export offers to the Middle East witnessed a $5/t increase w-o-w, reaching $530/t CFR UAE, up from $520-525/t CFR UAE last week. Japanese HRC offers to the Middle East stood at $515/t CFR UAE.

Outlook

Scrap demand is likely to remain weak, with sluggish exports adding pressure on prices. A potential downturn is expected around March-April, coinciding with Ramadan. Meanwhile, the Middle East HRC market is expected to stay stable in the short term amid a competitive pricing environment, while Chinese participation remains limited due to the Lunar New Year holidays.