UAE steel prices surge 10pc in one week
Dubai, July 20, 2008
Steel prices in the United Arab Emirates have risen almost 10 percent in one week as demand for construction materials continues to drain the local market, traders said on Sunday.
Gulf Arabs are investing heavily in real estate and suppliers of building material 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 more than six-fold rise in oil prices since 2002.
A tonne of reinforcing steel bar (rebar), used in construction, fetched around $1,700 on Sunday, up from around $1,550 on June 13, dealers said.
'If you are paying cash, you can get one tonne of steel at around $1,700, but if you are getting it on credit, you will have to pay 5 or 10 percent more,' one steel trader said.
'Some producers won't even sell to you at these prices unless you are having a large order,' he said.
One executive from a Gulf steel producer said prices could hit around $2,000 by the end of August.
Contractors have warned that they might have to stop working on some projects due to the losses from a surge in rebar steel prices to almost 6,800 dirhams ($1,851) a tonne from 6,000 dirhams last month, Al-Ittihad newspaper reported on Sunday.
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