The prices of various building materials in the Middle East rose by as much as 15 per cent in April as compared to the first quarter, said an industry expert.

Steel prices witnessed the steepest hike from $430 to $500 per tonne.

The price hike is the result of an increase in building material imports following a slowdown in regional orders from October 2008 to February 2009 due to overstocking, according to Danube Building Materials, a leader in construction and building materials.

As per the latest price indexes maintained by Danube, products whose prices jumped since last month include medium density fibreboards (MDFs), whose wholesale rate rose to $220 per cu. m. from $200 in March; and white wood, which rose by 10 per cent to $210 per cu. m. from $190.

In addition, freight costs have also increased from $300 to $650 for a 20-feet container in March, while a 40-feet container now costs $800 from previous rates of $550.

Dabube said it was optimistic about the positive effects of the major correction phase that is sweeping the entire Middle East construction market, which is an indication that the industry is reshaping to take on a stronger stance towards recovery.

Company officials also disclosed that they have observed increased buying activity within the building materials sector in April.

“The current correction in the real estate and property sectors is driving the shift in the prices of construction materials, which will eventually lead to a healthier market with more stable growth opportunities in the future,” said Rizwan Sajan, chairman, Danube Building Materials.

“As the market leader, we have identified that today’s market scenario gives us an exceptional opportunity to supply our top-quality products to support the continuous construction of major projects and developments across the region. We are also anticipating further increases until prices reach a stable level.”

Danube’s price index also revealed that average rates for the most basic building materials are as follows: steel props at Dh45 ($12.2) per piece, cement at Dh16 per bag, clear float glass (6mm) at Dh23 per sq. m., and aluminum profiles at Dh19 per kg.

A survey of the prices of imported wood products have also reflected a dip, with scaffolding planks sold at an average of Dh55 per piece, while Red Meranti from West Malaysia selling at Dh2,750 per tonne, European Whitewood at Dh925 per cu. m., Russian Beech wood at Dh2,750 per cu. m. and Kingplus film faced plywood at Dh125 per sheet.

'Our recent foray into steel, aluminum and glass manufacturing puts us in a strategic position to maximise the movement in market prices of these products and thereby drive our growth amidst the challenges of the global economic crisis,' he pointed out.

'Through our plans to further expand our operations and product offerings, we are hoping to do our part in pushing the growth of both the construction and real estate sectors,” Sajan added.-TradeArabia News Service