UAE scrap steel prices edge up, up AED 14/tonne week-on-week

en.Wedoany.com Reported - UAE domestic scrap steel market remained stable-to-firm week-on-week, with ample supply and good quality, but demand from various steel-consuming sectors prevented prices from falling significantly. BigMint assessed processed heavy melting scrap (HMS) at AED 996/tonne ($269/tonne) delivered Abu Dhabi, up AED 14/tonne ($4/tonne) week-on-week.

A trader in Dubai said steel mills are not currently concerned about raw material supply, but demand from various consumption sectors is sufficient to support prices, which limits suppliers' willingness to lower offers despite ample supply.

By specific category, HMS (80:20) was assessed at AED 890-900/tonne ($240-243/tonne) delivered Abu Dhabi, with prime HMS around AED 920-940/tonne ($248-254/tonne); processed and sheared HMS around AED 995-1,000/tonne ($269-270/tonne), and shredded scrap offers at AED 1,040-1,060/tonne ($281-286/tonne). Unprocessed PNS was offered at AED 980-990/tonne ($265-267/tonne), with processed scrap around AED 1,020-1,030/tonne ($275-278/tonne).

On the export front, offers for Middle East shredded scrap to Port Qasim were around $428-430/tonne.

Shipping disruptions in the Strait of Hormuz are putting pressure on UAE pipe deliveries and project execution. Although scrap supply remains ample, the downstream steel market is facing increasingly severe logistics and supply chain issues, with delays in raw material deliveries disrupting production schedules. Some UAE pipe producers have reportedly significantly reduced operating rates or temporarily halted production.

Even cargoes arriving at alternative ports are facing logistical difficulties. A UAE pipe industry source said production has come to a standstill, and medium plate orders have arrived at Fujairah Port, but vessels are still unable to berth.

The disruption is also beginning to affect project allocations. All orders for Azerbaijan's Absheron condensate field have reportedly been awarded to an Indian supplier, due to customer concerns over delivery risks from UAE suppliers. Similar considerations are reportedly affecting procurement for Indonesia's Geng North, a major offshore gas and condensate project.

Logistics reliability is becoming a key consideration in supplier selection, and the issue has gone beyond freight costs, posing a competitiveness challenge for UAE pipe producers. Large-scale projects depend on timely delivery of heavy plate and other raw materials. If the disruption persists, UAE pipe producers may face sustained pressure on capacity utilization and new project orders, and international buyers may shift procurement to suppliers with lower logistics risks.

Regional billet prices remain supportive, with Saudi billet reported at SAR 2,120-2,150/tonne ($551-559/tonne) ex-works, and GCC billet at around $495-503/tonne CFR. Saudi rebar prices are under pressure, with tier-one producers cutting offers to SAR 2,660/tonne ($692/tonne) delivered, down SAR 40/tonne ($10/tonne) from SAR 2,700/tonne, to stimulate sales and defend market share.

Smaller mills are offering at SAR 2,350-2,550/tonne ($611-663/tonne), up to SAR 450/tonne ($117/tonne) below the benchmark producer's official price of SAR 2,800/tonne ($728/tonne). Market participants attribute the price cuts to competitive pressure and current demand, rather than lower production costs. Buyers are highly price-sensitive, and the gap between official prices and tradable levels indicates the growing influence of smaller producers on market pricing, forcing larger mills to remain flexible to secure order volumes.

Looking ahead to the coming week, UAE scrap steel prices are likely to remain stable-to-firm, supported by steady mill demand and firm regional replacement costs. However, prolonged supply disruptions in the Strait of Hormuz and intense competition in Saudi rebar could erode steelmaking margins, thereby limiting mills' scrap purchases and curbing further price increases.