United Arab Emirates rebar traders and suppliers are baffled by rumours that the benchmark mill will increase its rebar prices for December delivery. Sector participants expect the announcement on Thursday this week, notes Kallanish.

After three consecutive months of rollover, the benchmark mill increased in late September its October-delivery rebar prices by AED 73/tonne ($20) to AED 2,515/tonne ($685). It then carried over the price for November. However, unlike in October, in order to increase its share of the rebar market in November, the benchmark mill offered spot sales opportunities to its MoU customers, bringing the average effective price of rebar to around AED 2,375/t for November transactions.

But interestingly, no sustainable improvement has been observed in the retail segment since September or even August.

When the October-delivery price increase was announced at the end of September, retail prices rose by AED 75-100/t for a few days but eased and settled at September levels of AED 2,370-2,410/t for benchmark mill rebar. They are still at the same level this week.

Secondary mills followed different pricing strategies, mainly adopting a hike of AED 35-70/t on September. Secondary rebar gained in the retail market by AED 20-40/t on September, pegging at AED 2,280-2,325/t, with the gap between benchmark mill and non-benchmark mill rebar narrowing to AED 100/t.

With no retail price increase occurring for the benchmark mill's rebar due to end-user resistance, traders are questioning whether or not the new rebar price hike will be digested by the market. At the same time, however, they doubt the accuracy of the price hike rumour.

"The benchmark mill has a different sales and pricing strategy. Demand and end-users may not support an increase, but December is the last month of the quarter and year. To improve its financials in the closing month of the year, they [benchmark mill] may increase their rebar quotes," comments a sector participant.