UAE: Scrap prices ease w-o-w; rebar demand driven by stockpiling amid uncertainty

• Logistics constraints still impacting raw material availability
  
  
• Stockpiling by contractors supporting short-term steel demand
  
  

UAE's domestic scrap market softened in the latest trade round, with spot prices declining by AED 10-30/t ($3-8/t) w-o-w. BigMint assessed the domestic HMS processed index down by AED 2/t ($1/t) w-o-w to AED 1,028/t ($279/t) DAP Abu Dhabi.

A recent deal for 1,000 t of processed HMS was concluded at AED 1,025/t ($279/t), while current offers are slightly higher at AED 1,040-1,050/t ($283-286/t). Shredded scrap offers were heard at AED 1,120-1,130/t ($305-308/t), indicating firm replacement costs despite the correction.

Price levels (DAP, excluding 5% VAT):

• HMS (80:20) processed: AED 1,025-1,030/t ($279-281/t)
  
  
• HMS super: AED 1,060-1,080/t ($289-294/t)
  
  
• LMS: AED 800-820/t ($218-223/t)
  
  
• Shredded scrap: AED 1,100-1,120/t ($300-305/t)
  
  
• PNS unprocessed: AED 1,040-1,060/t ($283-289/t)
  
  

A trader noted that "buying interest has slowed after last week's bookings, but mills are still testing lower offers due to sufficient scrap inflows". Another participant added that "buyers are cautious at current levels, preferring hand-to-mouth procurement".

The UAE rebar market continues to witness strong activity, supported by contractor-led buying. However, this demand is largely driven by stockpiling amid concerns over supply disruptions and logistics constraints. April demand is estimated at around 400,000 t, although nearly 100,000 t is expected to shift into May, suggesting effective consumption closer to 320,000-350,000 t.

Retail rebar prices are currently at AED 2,800-2,900/t ($762-790/t) delivered, with mill offers at AED 2,650-2,700/t ($721-735/t). Imports from Oman and Qatar remain competitive at AED 2,650-2,670/t ($721-727/t). However, if scrap inflows improve and demand weakens, mills may face margin pressure, potentially leading to downward adjustments in both rebar and scrap prices.

Outlook

Rebar supply is expected to improve by mid-summer, potentially reaching 0.5 mnt, while demand may fall below 0.4 mnt. This could pressure both steel and scrap prices, especially if inventories remain elevated. On the scrap side, improved availability may ease domestic price support and narrow replacement cost pressures, particularly if buying slows after the current stockpiling phase.