A number of local steel and non-ferrous scrap dealers are on the verge of bankruptcy as a result of an export levy imposed on steel scrap by the UAE’s Ministry of Finance and Industry.
The government came to the rescue of domestic iron and steel manufacturers by imposing a levy of Dh250 per tonne on the export of iron and steel scrap.

A Dubai Customs circular on September 11 said: “In accordance with the Federal Cabinet Decree No 262/4 of 2004, export and re-export of steel scrap shall not be permitted unless a no-objection certificate issued and stamped by the Ministry of Finance and Industry is submitted for each shipment, confirming payment of an export fee of Dh250 per tonne.”

The notice came into effect on September 13. The decision was to discourage the export of iron scrap so that it is available for the iron and steel industry to make different products, which are in huge demand because of new construction projects that are announced almost daily.

The decision to impose the levy as a deterrent has been taken following the suggestions by the local iron and steel industry, which was facing serious shortage of the raw material for a long time. It has also been one of the factors in the recent escalation of prices of steel products.

In the UAE, seven iron and steel factories are engaged in the manufacture of various steel products, such as iron bars, which are consumed by local construction industry. Of these, three are in Jebel Ali, two in Sharjah and one in Musaffah in Abu Dhabi.