Abu Dhabi steel prices surge 91pc in H1
Abu Dhabi, August 16, 2008
Steel prices in Abu Dhabi soared 91 per cent in the first half of 2008 as demand for construction materials drained the local market, official data showed on Sunday.
Building material suppliers are struggling to keep up with demand as the UAE, the second-largest Arab economy, witnesses a construction boom buoyed by a near seven-fold rise in oil prices since 2002.
In the UAE capital Abu Dhabi, steel prices rose from Dh3,139 ($854.6) per tonne in January to Dh6,000 ($1,634) per tonne in June, data from the Abu Dhabi Department of Planning & Economy showed.
The prices of Korean iron, used for building bridges, rose 14 per cent in July to Dh6,250 ($1,702) per tonne, compared with Dh5,500 ($1,497) in June, the data showed.
The emirate’s steel consumption rose 24.6 per cent to 2115.2 tonnes in 2007 compared with the previous year, the data showed.
Steel production output in Abu Dhabi hit 830,000 tonnes last year, meeting only 39.2 per cent of steel demand in the emirate, the department said in the monthly report.
Steel production capacity in the capital is expected to reach about 1.5 million tonnes a year by the end of the 2009, the department said.
Price controls on building materials are one way Gulf Arab governments are trying to control inflation, which surged to 11.1 per cent in the UAE last year, the highest in at least 20 years. Abu Dhabi inflation was 11.7 per cent in 2007.
The UAE ordered a country-wide lifting of customs duties on cement and steel in March, aiming at ’stabilising the real estate market and the construction boom and to reduce the burden.
The steel prices in the UAE have dropped about 15 per cent since the end of July as a decline in global prices coincided with the summer lull in the desert country, traders said earlier this month.
On July 20, a tonne of steel was traded at around $1,700 a tonne as demand for construction materials continued to drain the local market.
Gulf Arabs are investing heavily in construction and suppliers of building materials are struggling to keep up with demand in the UAE.-Reuters
