In recent developments within the UAE's rebar market, a notable shift in end-user consumption habits is unfolding, driven by a significant price disparity between rebar sourced from benchmark mills and secondary mills. This disparity currently stands at AED 90 per tonne (24.5 USD), prompting distinct changes in market dynamics and consumer preferences.
Key to this shift is the evolving preference among private sector end users, especially those engaged in non-government projects, who now favor rebar from secondary mills due to its lower cost advantage. The price differential is stark, benchmark mill rebar is priced between AED 2,270-2,310 per tonne (618-629 USD), whereas secondary mills offer quotes ranging from AED 2,180-2,220 per tonne. This pricing gap, coupled with varying credit and delivery terms, has significantly influenced purchasing decisions.
Market observers highlight the impact on traders, as inventories of benchmark mill rebar face intensified competition from the rising demand for secondary mill products. This preference for secondary mills is expected to endure unless the price gap narrows to approximately AED 50 per tonne, underscoring the sensitivity of market dynamics to price differentials.
Looking ahead, anticipation surrounds the upcoming August-rolling rebar price announcement from the benchmark mill, expected around July 23-24.
The benchmark mill aims to fulfill 80% of rebar deliveries for July orders ahead of the price announcement, emphasizing the strategic timing and logistics involved in managing market transitions.
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