The UAE’s local steel prices are being hit by dumping from Turkish manufacturers of the metal, the chief executive of RAK Steel, a major steel manufacturing mill in Ras Al Khaimah, has said.

Global demand has slumped with the economic slowdown, leaving inventories swollen and sellers struggling to find markets for steel.

'There is so much dumping going right now in the UAE by Turkish steel companies that the local price is having a hard time recovering,' Ajay Aggarwal told Reuters.

Prices in the UAE of rebar steel, which is mainly used for construction, were at around $500 per tonne compared to $1500 last year, Aggarwal said.

'There is no doubt that prices last year were exceptional but at the same time we are now unable to compete with the Turkish import price,' he said. 'Dumping is slowing down the recovery of the sector and our profitability.'

In effort to eliminate the problem UAE authorities had imposed a 5 per cent custom duties fee on the meal in February, said Aggrwal.

'But many of these companies find ways to escape the custom charges by importing small amounts of steel at a time, that’s why some other action must be taken.'

The UAE's economy minister voiced his concern about dumping in April and said that the country was working with a number of Gulf states to address the issue.

Concerns about protectionism globally are rising as the impact of the financial crisis spreads, trade flows fall and governments consider measures to help firms survive the downturn.

Steel featured in many measures taken by governments listed in a World Trade Organisation (WTO) report earlier this year that could be seen as restricting trade.

RAK Steel, a joint venture with sovereign wealth fund Ras Al Khaimah Investment Authority (Rakia) produces around 30,000 tonnes of steel per month which is mainly sold domestically, said Aggrwal.

'I cannot provide details about our financial situation but I can tell you that our inventories are low but everyone knows that 2009 is not a strong year.'

The company has plans to increase its capacity to 750,000 tonnes per year by the end of 2009. – Reuters