UAE: Scrap prices fall $5/t w-o-w; billet market firm amid supply disruptions

• • Scrap prices ease as buyers resist higher offers

• • Billet prices supported by tight metallics supply

• • Logistics constraints continue to disrupt GCC trade flows

Domestic scrap prices in the UAE recorded a marginal w-o-w in the week ended 10 April, as cautious procurement by mills and traders continued to keep market bearish. BigMint assesed domestic HMS processed index dropped by AED 18/t ($5/t) w-o-w and stood at AED 1,030/t($280/t) DAP Abu Dhabi.

A UAE-based trading house representative noted that HMS processed was at AED 1,030-1,050/t ($280-286/t) DAP Abu Dhabi, while shredded scrap was indicated at AED 1,080-1,100/t ($294-300/t), adding that no fresh offers are currently being floated as participants await clearer market direction. Another deal was heard concluded at AED 1,025/t ($277/t) for HMS processed. Current workable levels are reported at AED 1,100/t ($300/t) for shredded, AED 1,075/t ($293/t) for PNS, and AED 1,030/t ($280/t) for HMS processed (DAP Abu Dhabi).

A trader commented, “The market is uncertain about near-term movements as buyers are not readily keeping their bids high,” highlighting weak confidence and limited appetite for aggressive stocking.

DAP prices (excluding 5% VAT) were heard at below levels:

• • HMS (80:20) processed: AED 1,025-1,035/t ($279-282/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)

Billet prices hold firm on tight raw material supply:

In contrast, billet prices in the UAE remained steady at $550-560/t delivered, supported by constrained availability of metallics and feedstock shortages across the UAE and Oman. Mills are operating at nearly half capacity, underpinning billet prices despite sluggish downstream demand.

Chinese billet offers were heard lower at $460-465/t FOB; however, preference remained tilted towards Indonesian suppliers due to certification advantages and better market acceptance. On the import front, Indonesian-origin ECAS-certified billets were booked at $480-490/t FOB, with expected CFR UAE levels at $530-540/t for 45,000-50,000 t cargoes scheduled for mid- to end-May shipments.

Logistics disruptions tighten supply chain:

The UAE steel sector continues to face mounting pressure from persistent logistics disruptions in the Strait of Hormuz, delaying raw material inflows and creating a backlog in semis and metallics supply. Despite geopolitical developments, including discussions around a US-Iran ceasefire, there has been no tangible improvement in shipping activity.

Market participants highlighted severe visibility issues regarding incoming cargoes, complicating procurement planning. “The issue now is not only supply, but timing. Even if cargoes are coming, they are not arriving when needed,” a mill source said. As a result, several producers in Dubai and Abu Dhabi are adjusting operational schedules, with some re-rollers opting for maintenance shutdowns due to insufficient feedstock.

Another participant added, “There is simply not enough material to keep all lines running.”

Alternative routing via Fujairah (UAE) and Sohar (Oman) is being increasingly utilised; however, these routes involve higher logistics costs, handling challenges, and longer delivery timelines, limiting their ability to fully offset disruptions through traditional Hormuz routes.

Regional billet trade sees sporadic deals:

Across the GCC, billet trade remains fragmented. A 30,000 t Chinese billet cargo was booked at around $480/t FOB Oman, equivalent to $510-520/t CPT UAE. Additional cargoes routed via Sohar and Fujairah indicate a structural shift in supply chains toward indirect routing.

In Saudi Arabia, imports through Red Sea ports such as Jeddah, Yanbu, and Rabigh continue relatively unaffected. However, negotiations with Russian suppliers remain slow due to logistical uncertainties rather than payment constraints. A GCC buyer noted, “It is difficult to conclude billet deals now as suppliers are hesitant to commit amid shipment risks.”

Outlook:

The UAE and wider GCC ferrous market is expected to remain under pressure in the coming days. Tight metallics availability will continue to support billet prices, while weak buying sentiment and logistical bottlenecks are likely to restrict trade volumes. May is expected to be a critical period, with further tightening in supply potentially pushing prices higher if disruptions persist.