UAE: Weak domestic sales keep scrap market largely rangebound w-o-w

• New billet certification regulation aims to reduce uncertified imports
  
  
• Spread between UAE and imported HMS narrows to $18-20/t
  
  

The UAE's domestic ferrous scrap market witnessed a range-bound trend in prices, increasing slightly by by AED 6/t ($2/t), with some limited trades heard over the past few days.

Market insiders informed that amid reduced export activity and limited domestic sales local scrap buying activities remain slow from major buyers.

BigMint's benchmark assessment for HMS (80:20) processed scrap rose slightly by AED 6/t ($2/t) to AED 1,233/t ($336/t) compared to last week.

As per BigMint's Week 3 market survey, approximately 4,000 t of processed HMS (80:20) were sold at AED 1,225-1,235/t ($333-340/t) DAP Abu Dhabi.

A mill representative said, "Current domestic prices for HMS (unprocessed) are AED 1160-1170/t($316-319/t), fabrication at AED 1,270-1,280/t($346-349/t), processed HMS at AED 1220-1230/t($332-335/t), and shredded scrap at AED 1300-1320/t($354-359/t).

A market insider from Abu Dhabi commented, "Indicative prices for domestic ferrous scrap are: HMS unprocessed at AED 1,180-1,190/t($321-324/t), fabrication at AED 1,280-1,290/t($349-351/t), processed HMS at AED 1,200-1,210/t($327-329/t) for bids and AED 1,240-1,250/t ($338-340/t) for offers, and shredded scrap at AED 1,300/t ($354/t)."

Recent workable prices in the UAE for LMS are at AED 930-940/t ($253-255/t), up AED 30/t w-o-w; HMS (80:20) unprocessed at AED 1,160-1,170/t ($316-318/t), stable; HMS processed at AED 1,220-1,230/t ($332-335/t), range-bound; fabrication at AED 1,260-1,280/t ($343-348/t), stable; and rebar end-cut and shredded at AED 1,290-1,300/t ($351-354/t), stable.

A Dubai-based trader commented, "HMS processed prices are holding steady at around AED 1225-1240/t ($334-338/t), with a couple of mills currently buying HMS at AED 1230-1240/t ($335-338/t) DAP."

HMS (80:20) spread

The average spread between CFR Nhava Sheva HMS (80:20) from Europe and UAE local HMS (80:20) processed scrap narrowed to approximately $18-20/t from $24-25/t a week ago. Imported HMS prices for CFR west coast of India stood at $354-355/t, while UAE processed HMS prices were at $335-336/t DAP Abu Dhabi.

Export market

Inquiries for UAE PNS were heard at $385-390/t CFR Chattogram, with LC issuance easing for Dhaka buyers, boosting interest in Middle East material. UAE fabrication is priced at $390/t for 500 t at Port Qasim, while Kuwait LMS bales are offered at $355-360/t for 250-500 t at the same port.

UAE steel market updates

New billet certification regulation: The UAE's Ministry of Industry and Advanced Technology has introduced a regulation requiring billets used for rebar production to be certified by an authority like CARES. Effective 27 November 2024, billets must carry the Emirates Conformity Assessment Scheme (ECAS) mark under the Emirates Quality Mark (EQM) scheme. The sale of rebar made from uncertified billets will be prohibited.

This regulation aims to phase out imports from sanctioned countries and ensure billets are sourced from ECAS-certified mills, reducing overall imports. Smaller businesses previously relying on non-certified billets must now procure from certified domestic suppliers.

Producers have until 10 January to update the origin information of uncertified billets produced before the enforcement date. After this deadline, uncertified billets will be banned, and non-compliant manufacturers will face market restrictions. While the regulation promotes quality and transparency, concerns remain about its impact on competition and the risks of errors or fraud during certification.

Chinese HRC export prices decline: China's HRC export offers to the Middle East dropped further by $10-15/t w-o-w to $485-490/t CFR UAE, down from $500-505/t last week. A deal for 10,000-12,000 t was reportedly concluded at these levels for February shipments, increasing pricing pressure on other exporters.

Indian mills remain inactive: Indian mills are not actively offering HRC to the Middle East. The last heard indicative offers were around $530-535/t CFR UAE, keeping them less competitive compared to Chinese suppliers.

Outlook: Scrap demand is likely to remain strong, but a sluggish export market is expected to exert pressure on prices. A potential dip could emerge around March/April, aligning with the Ramadan period.