The Ministry of Economy, UAE has issued a notice this week stating that effective from 15th May 2020, (tomorrow) export of all ferrous scrap and paper scrap has been banned for a period of four months. The decision comes in the light of a scarcity of scrap raw material being faced by UAE based steel mills, recently as per market participants.
The Ministry has ordered all stakeholders to take necessary action for implementation of the same.
According to reliable sources, since the covid-19 outbreak and the lockdown that followed, the scrap recycling activities in UAE had suffered major disruptions. On account of the same, when the steel mills in the country looked to increase the production again after easing of the restrictions, there was a shortage of quality scrap witnessed in the market, driving the prices up, which encouraged local mills to pressurize the government into banning the scrap exports for few months, until the demand supply balance in the domestic market is restored.
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. For quite some time, UAE had been the number one origin for HMS import for Pakistan as well as India. The secondary mills in western India and Pakistan will be impacted by the decision, who will now have to look for alternative origins to compensate for their HMS scrap imports.
Out of the total 5.74 MnT of ferrous scrap imported by India in CY19, UAE accounted for a share of 18%, exporting 1.03 MnT of scrap to India in the year and remaining the largest scrap exported to the India.
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