This week, the domestic scrap market experienced a downturn, marked by multiple transactions with Pakistan and Bangladesh. The market remained subdued, mainly due to the recent imposition of new export duties on ferrous scrap exports.
According to recent statistics from BigMint, the UAE, as the 40th largest steel producer, witnessed a 2% y-o-y decline, totalling 3.15 million tonnes (mnt) in CY’23 compared to 3.21 mnt in CY’22.
As per market insiders, “Mills are maintaining prices to support suppliers till now but may reduce any time next week.”
An official from a major trading house informed, “This week everyone is in wait-and-watch mode; let’s see how markets behave on Monday.”
In BigMint’s bi-weekly assessment, there was a modest decline of AED 7/tonne (t) for HMS (80:20) processed scrap, keeping the price at AED 1,325/t ($361/t) DAP.
BigMint’s Week 5 market survey indicated moderate activities, with a nominal volume of mixed scrap grades at AED 1,310-1,430/t, encompassing HMS processed and shredded scrap on a DAP Abu Dhabi basis.
Buyer and seller indications: The UAE scrap market witnessed sellers quoting AED 1,320-1,340/t for processed HMS (80:20), and AED 1,440-1460/t for shredded scrap on a DAP Abu Dhabi basis. Conversely, buying indications suggest HMS super/unprocessed grade valued at around AED 1,230-1,250/t, while processed HMS was observed in the range of AED 1,290-1,300/t.
HMS (80:20) spread: The average spread between CFR Nhava Sheva HMS (80:20) and UAE local HMS (80:20) processed scrap prices in the current week continued to trend downward at around $32-35/t, following an increased trend in domestic scrap prices. Imported HMS (80:20) prices CFR west coast India remained steady at around $395-400/t, while UAE HMS (80:20) processed scrap prices held at $358-361/t DAP.
According to the export scrap market survey, some activities were recorded, including notable deals such as the sale of approximately 1,000 t of HMS 1 scrap at $425/t on a CFR Chattogram basis. A Pakistan-based mill secured around 600 t of HMS (80:20) and processed HMS scrap within the price range of $409-410/t on a CFR Qasim basis. The current indicative price for UAE-origin HMS 1 and PNS mix is $425-430/t on a CFR Qasim basis.
Outlook: According to market participants, the outlook for the upcoming week appears unpredictable, especially regarding prices. There is a possibility that domestic mills might reduce their purchase prices to maintain margins on finished steel.
