Posted on 05 Dec 2023
In United Arab Emirates, the price differential between benchmark mill Emirates Steel and local secondary mills, including Oman's Jindal Shadeed, has exceeded AED 220/tonne ($60) after discounts are deducted from list prices. This comes as the market maker’s prices are growing faster than other suppliers.
This is causing concern among traders. Rebar deals in the Northern Emirates have formed a secondary market, with prices at AED 30-40/t lower than in Abu Dhabi and Dubai, notes Kallanish.
Secondary mill rebar deals for December deliveries closed at around AED 2,250-2,275/t in the Northern Emirates and at AED 2,280-2,305/t in Abu Dhabi and Dubai. Meanwhile, the benchmark mill announced its price at AED 2,596/t ($707) cpt Abu Dhabi and AED 2,604/t ($709) cpt Dubai, Sharjah and Northern Emirates, all delivered on 90 days credit.
Some secondary mills offering rebar at AED 2,290-2,300/t delivered against 90 days are meeting strong resistance from traders in Dubai and Abu Dhabi, who are asking for a compromise of AED 10-20/t.
Due to National Day, the market was closed on 4 December. Mills are expected to close bookings this week.
Retail prices for secondary mills’ rebar are at AED 2,350/t in Abu Dhabi and Dubai, and at AED 2,290-2,300/t in the Northern Emirates, while Emirates Steel is at AED 2,430-2,480/t delivered on credit. Emirates Steel cash rebar transactions were even heard at AED 2,400-2,410/t delivered.
"In terms of sales volumes, the market is good, but price wise it is depressing. Retail prices from November have not gained despite the benchmark mill increasing its rebar price by AED 73/t [$20] on November. This week is critical for the conclusion of December-delivery rebar deals," comments a buy-side source.
In the first week of the month, the benchmark mill may react and come into the market with discounted “project” sales. It will thereby offer limited quantities of rebar due to unimproved retail quotes leaving no margin for traders, and taking into account the widening rebar price gap between itself and other mills.
Source:Kallanish
