Scrap prices in the United Arab Emirates are poised to increase due to ongoing export activities and reduced collection during Ramadan. Despite the imposition of export duties amounting to AED 400/tonne ($109) on ferrous scrap, traders are resorting to false declarations to avoid paying the tariff, risking significant penalties. Recent changes in senior leadership at Dubai Customs suggest heightened monitoring and surveillance of shipments in the steel sector.

The situation is characterized by rampant smuggling under the guise of exports, prompting calls for stricter enforcement. With reduced scrap collection during Ramadan and continuous exports exacerbating market shortages, domestic prices are expected to surge. In the current market, buyers are paying AED 1,280-1,300/t for fabrication and HMS Sheared, AED 1,180-1,200/t for HMS Super (90:10), and AED 1,125-1,175/t for HMS 80:20. Some buyers may opt to increase their purchase prices by AED 25-50/t to secure supply amid the scarcity.

The billet market had been awaiting the announcement of the UAE benchmark mill's April rebar price, which was disclosed recently. An induction furnace-route producer finalized a sale of 130mm 3sp modified billet at $545/t cpt for immediate delivery. Additionally, unsolicited offers for ex-Iran 3sp rebar-grade billet were priced at $515-520/t delivered for April shipments.

In Oman, local EAF-route long steel producers are targeting rebar-grade billet at $525-530/t ex-works. Enquiries for billet from Egypt have commenced, although negotiations are still in the early stages, indicating potential shifts in the regional steel market dynamics.

Source: Kallanish