The Government of the United Arab Emirates (UAE) has announced the lifting of the ban on the export of ferrous scrap and other industrial waste, introducing export taxes instead.
The taxes that the government has announced are as follows:
- For ferrous scrap with HS (Harmonised Commodity Description and Coding System) codes 720450, 720449, 720441, 720430, 720429, 720421 and 720410, the tax is set at AED 400 per tonne ($109).
- For copper waste and scrap, with HS code 74040000 the tax is also set at AED 400 per tonne (USD 109).
- For aluminium scrap with HS code 76020000 the tax is AED 100 (USD 27).
Potential impact on ferrous scrap trade
- Increased export trade: For UAE scrap suppliers, which were previously limited to domestic markets, this change is expected to stimulate the growth of scrap and waste trade in the Middle East and North Africa.
- Challenges for local mills: Small local mills in the UAE may find it difficult to compete with international scrap buyers due to higher costs.
- Lower profitability for exporters: Scrap buyers believe that UAE exporters will have to absorb the cost of the tariff to remain competitive, which could affect their profits.
- Uncertain impact on market prices: The exact impact of the duties on scrap prices and overall market dynamics remains unclear.
The UAE’s decision to lift the export ban and impose tariffs on scrap and waste exports may represent a major policy change with potential impacts on both domestic and foreign markets. While it opens up opportunities for UAE scrap suppliers, as discussed above, it also raises concerns about the competitiveness of local mills and the profitability of exporters.
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