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Steadfastness in the GCC billet market as UAE experiences local scrap price surge

The Gulf Cooperation Council billet market remains stable. Commercial billet producers and integrated mills are awaiting the October rebar price announcement by Emirates Steel, the reference mill in the United Arab Emirates.

Steadfastness in the GCC billet market as UAE experiences local scrap price surge

In a dynamic turn of events within the Gulf Cooperation Council (GCC), the billet market remains steadfast in its stability, while local scrap prices in the United Arab Emirates (UAE) have witnessed remarkable surges.

Despite being the second largest scrap producer in the GCC, trailing only Saudi Arabia, the UAE has struggled to completely halt scrap exports, primarily due to challenges in enforcing regulations and monitoring activities in the sector. As a consequence, scrap prices within the UAE have been on a consistent upward trajectory, escalating by 30-50 AED per ton (equivalent to $8.1-13.6) on a weekly basis. The domestic market in the UAE now sees HMS 80:20 quality scrap prices ranging from 1,175 to 1,200 AED per ton, with fabricated scrap prices reaching levels of 1,230 to 1,275 AED per ton. Industry experts and market participants anticipate another increase of 30-50 AED per tonne in the upcoming week.

Turning the spotlight to billet pricing, the market reflects an intriguing landscape. Electric arc furnace route 130/150 mm 3sp billets sourced from Oman are currently available at an offering price of $525 per ton, slated for delivery to the UAE. Meanwhile, offers originating from Iran hover between 495 and 505 $ per ton on a cost and freight (cfr) basis at UAE ports.

Local induction furnace mills operating in the UAE have set their pricing targets at 525-530 $ per ton ex-works and are holding their offers steady until Emirates Steel announces its new rebar prices. Market analysts anticipate that any incremental uptick in rebar prices for deliveries in October will inevitably ripple through to influence the pricing strategies of commercial billet producers.

Additionally, offers for Oman-sourced 130 mm 3sp billets are being made at levels of 535-540 $ per ton cfr Egypt, which translates to an equivalent of 505-510 $ per ton ex-works. 

In an intriguing development, a Kuwaiti mill recently secured a 2,000-ton trial batch of 130 mm 4sp induction furnace line billets from Saudi Arabia at an approximate rate of 540 $ per ton, delivered cost and freight to Kuwait.

Within the broader context of the GCC, Iranian EAF route billet offers for shipments scheduled for October are currently priced at 470-475 $ per ton free on board (fob). This translates to 495-500 $ per ton cost and freight (cfr) at ports in Oman or the UAE. Notably, a factory official has provided insights indicating that "the power outage in Iran will conclude at the end of September, leading to increased semi-finished product supply with new export tenders at the beginning of October."

Furthermore, last week witnessed a significant international transaction, with over 20,000 tonnes of 150 mm 3sp billet sourced from Iran being successfully sold to Indonesia at a rate of 498 $ per ton cost and freight (cfr) through a trading company, highlighting the far-reaching impact of the GCC billet market.



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