Steel prices in the United Arab Emirates 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 on Sunday.

A tonne of reinforcing steel bar (rebar), used in construction, fetched around $1,400 on Sunday, down from around $1,650 in last week of July, dealers said.

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, the second-largest Arab economy.

The rising cost of building materials is helping fuel inflation across the Gulf, where economies are flourishing on a six-fold rise in oil prices since 2002.

’We think that trade in (Islam’s holy month of) Ramadan will be slower than last year, so why would I pay more for something I can get for much less in less than a month,’ one trader said.

The UAE lifted customs duties on cement and steel in March to stabilise the real estate market and to reduce the burden on contractors.-Reuters