The Ministry of Economy, UAE has issued a notice recently, stating that the temporary ban on steel scrap and waste paper exports has been extended for a period of another four months. Earlier UAE had issued a similar notice which was effective from 15 May’20, for a period of four months ending 15 Sep’20 in order to strengthen the country’s domestic demand.
Reasons behind extending the scrap export ban –
Domestic scrap shortage owing to the pandemic and high domestic requirement in UAE are the key reasons behind the extension of the export ban, sources reported SteelMint.
The export has been prohibited to help the supplies of raw materials which are required by the economic operators for their manufacturing activities.
The major steel makers in UAE located in Abu Dhabi, and Shattaf Steel located in Sharjah-based announced a decreased outline in the production out for the month of April as there is a slowdown in the economic activity of UAE.
Impact of UAE’s export ban on South Asian countries
UAE has been a major source of imported HMS scrap for Pakistan and India, owing to its very short transit time and a huge variety of grades and quality of material offered. Out of the total 5.74 mn t of ferrous scrap imported by India in CY19, UAE accounted for a share of 1.03 mn t.
Despite the UAE’s scrap export ban, India has imported around 30,000 t during Jun’20. If sources are to believed, there have been HMS offers floating in both Pakistan and India from UAE origin. Recent offers for HMS 1 were reported at $315-318/t CFR port Qasim. Hence, market participants’ opinion that not much impact may be expected due to this as despite ban, few trades are still being concluded.
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