The start-up of Al Ghurair Iron and Steel plant in Abu Dhabi has been delayed to May due to construction obstacles, company officials said on Monday.

The $85-million cold rolling and galvanising plant, the first-of-its kind in the UAE, was due to start production in September to help meet demand from a booming construction sector.

"We hoped construction could be finished by the fourth quarter of last year, but this won't happen before March due to obstacles at the site," a company official told Reuters, without giving further details.

"Now we are aiming to start production this May," he said.

In the first phase of the project, a joint venture of Saif Al-Ghurair group and Tradeline, the plant will produce 100,000 tonnes of hot rolled and pickled and oiled steel products, 50,000 tonnes of cold rolled full hard steel and 200,000 tonnes of galvanised materials.

The second phase of the project is expected to be completed by the end of 2010 and raise the plant's total capacity to
500,000 tonnes of steel products, an official said.

Tradeline said it hoped to meet 50 per cent of the galvanised steel demand in the UAE, which now stands at 400,000 tonnes per year. It has said it plans to export 40 per cent of the plant's output to international markets such as the US.

Iron and steel producers are banking on demand from the construction industry in the world's biggest oil exporting region, where more than $1 trillion of infrastructure projects are in the pipeline.-Reuters