Emirates Steel to continue use of local scrap for steel production
The steel manufacturer, a subsidiary of ADQ, will purchase more than 1 million tonnes of scrap material on an annual basis
Abu Dhabi-based integrated steel manufacturer Emirates Steel, which is a subsidiary of ADQ, will continue to support trade and business in the UAE by purchasing local scrap material for use as feed stock in its production process.
Emirates Steel has committed – along with other steel producers – to purchase all local scrap according to international prices. The firm will purchase more than 1 million tonnes of scrap material on an annual basis.
Commenting on the decision, the CEO of Emirates Steel, Eng Saeed Ghumran Al Remeithi, said: “As it continues to service key sectors of the UAE economy, including construction, energy and transportation, Emirates Steel is proud to support local traders around the country in sustaining their businesses.
“In addition, our synergies enable Emirates Steel to recycle scrap and advance the UAE’s sustainability goals.”
The announcement follows a recent decision by the Ministry of Economy to prohibit all concerned and registered facilities in the UAE from exporting iron scrap.
The decision seeks to help local production facilities maintain business continuity and also promotes domestic production by ensuring that producers in the country have easy access to raw material supplies locally for their manufacturing operations.
As a complex integrated manufacturing plant that employs cutting-edge solutions to tackle traditional industrial challenges, Emirates Steel uses direct reduced iron (DRI) and ferrous scrap as the main feedstock for its electric arc furnaces.
Currently, scrap accounts for 30% of the raw material in the company’s Steel Making Plant One (SMP1). Today, the company aims to increase the usage of scrap as feedstock for other steel making plants especially with the surge of iron-ore prices.
Al Remeithi added: “Emirates Steel values the UAE leadership’s ongoing efforts to protect the local steel industry. The company is committed to supporting the steel industry value chain and will ensure we stand by the Ministry of Economy decision to prevent the export of scrap materials that are considered prime feedstock in manufacturing steel.
“Moreover, as scrap is turned into an added value product, manufacturers are forced to import it from abroad at high prices because it is an important component in many industries. Currently, the local steel industry needs the entire local scrap business to sustain its operations.
“Now more than ever, the UAE steel industry needs protection especially with challenges it faces including, sharp reduction in steel demand, slowdown in construction activity and restriction on exports. The majority of countries in the world are protecting their steel national industry; we need to apply reciprocity on our open market by imposing customs duties on steel imports.”
In 2019, Emirates Steel only used 280,000 tonnes of scrap material due to difficulties in sourcing this vital material form the local market.
Currently, the UAE is Asia’s second largest scrap exporter after Japan, and accounts for 1.6% of the world’s ferrous scrap export. Among the UAE’s top scrap importing partners are India (31%), Pakistan (25%), and Oman (11%). The UAE has a scrap reserve of 1.5 million tonnes per annum.