The import trade restrictions which were relatively recently imposed in Saudi Arabia have brought the country’s longs purchases from the UAE to a halt and have naturally been having a harsh impact on the Emirates-based producers. Rebar supply has increased versus the subdued demand and so local prices in the UAE have been going down.
According to sources, UAE-based mills have been selling a total of around 40,000-50,000 mt of rebar to Saudi Arabia per month and now these volumes need to be redirected. Since the other neighboring markets are not large, the UAE domestic buyers are targeted. “Here in the UAE, the whole market in terms of consumption is around 120,000-130,000 mt these days, and now, these additional lots which were traded to Saudi Arabia, they are trying to sell here too,” a local supplier told SteelOrbis.
As a result, the domestic workable prices for rebar in the UAE have been falling. While the official levels are at AED 2,700-2,725/mt ($736-743/mt) ex-works, the producers have decreased prices to AED 2,650-2,680/mt ($722-730/mt) ex-works. However, the latest workable levels have been reported at AED 2,620-2,630/mt ($714-717/mt) ex-works. Moreover, Emirates Steel Industries (ESI) is expected to soon announce offers for September production and to drop them by $25-50/mt, as sources believe. Retail rebar offers in the UAE have fallen by AED 55-75/mt ($14-20/mt) over the past two weeks to AED 2,675-2,775/mt ($729-756/mt) ex-warehouse depending on the origin, SteelOrbis has learned.
Ex-Oman offers to the UAE have been reported at AED 2,700/mt ($736/mt) CPT from a first-tier supplier, while other producers’ prices are down to AED 2,600/mt ($708/mt) CPT.
It is worth mentioning, that according to market information, the municipalities in the Abu Dhabi emirate and the city of Al Ain have shared a document stating that all the governmental construction projects in these areas are now obliged to use Emirates steel in all the investments, which has been interpreted by many as meaning UAE-origin materials. This is expected to have an effect on the shipments from Oman to a certain extent.
$1 = AED 3.67