Higher prices for feedstock have taken a toll on prices for rebar in the UAE, even though activity continues to be stalled, amid the collapse of demand due to Covid-19.
Accordingly, UAE-based Emirates Steel Industries (ESI), the flagship in the UAE’s longs market, has announced its rebar price for December production at $540/mt (AED 1,984/mt) ex-works, increasing it by $13/mt (AED 48/mt) compared to the previous round of sales. “The increase was expected, but the quantum is less than expected, probably considering the end of the year and a depressed market in the UAE,” an Emirati trader commented. The producer, in its turn, increased its offers, following the uptrend in the global steel market and, consequently, aiming to offset its input costs.
Other rebar suppliers in the Emirati market, including suppliers from Oman, are traditionally anticipated to follow the same policy. However, as of now, the market lacks certainty regarding what size of increase will be accepted by traders and, in general, regarding the further development of the market. “We need to wait and see since all traders have stocked enough, having expected this increase,” a UAE-based trader commented. The situation has gotten complicated due to the availability of much cheaper material from Oman. According to market sources, the most recent deals for ex-Oman rebar have been signed at $468-471/mt (AED 1,720-1,730/mt), delivered. Lately, domestic retail rebar prices in the UAE were set at around $482-507/mt (AED 1,770-1,860/mt) ex-warehouse, with the higher end of the range valid for ESI-origin rebar.
Sources expect that consumption in November will still not exceed 150,000-160,000 mt. “It was about 155,000 mt in October. November volumes should be the same. The market has slightly improved from April-August levels, but is stuck at these numbers,” one trader stated.