News Archive
Abu Dhabi steel prices rocket 91% in six months
Released on 25/08/2008
Steel prices in Abu Dhabi rose 91 per cent in the first half of 2008 as a construction boom in the United Arab Emirates drained the local market.
Official data from the Abu Dhabi Department of Planning & Economy showed that building material suppliers are struggling to keep up with the expansion sparked by the profits from a seven-fold rise in oil prices, Arabian Business.com reported.
The data showed that steel prices rose from US$854.6 per tonne in January to US$1,634 per tonne in June in the UAE capital. The prices of Korean iron, used for building bridges, rose 14 per cent in July to $1,702 per tonne, compared with US$1,497 in June, the data showed.
The emirates steel consumption rose 24.6 per cent to 2115.2 tonnes in 2007 compared with the previous year, the data revealed, according to Arabian Business.com.
Local production of steel failed to meet the high demand. It hit 830,000 tonnes last year, meeting only 39.2 per cent of requirements, although by the end of 2009 the capital’s steel production should increase to about 1.5 million tonnes a year.
Price controls on building materials are one way Gulf Arab governments try to control inflation, which surged to 11.1 per cent in the UAE last year, the highest in at least 20 years. Abu Dhabi inflation was 11.7 per cent in 2007.
The UAE ordered a country-wide lifting of customs duties on cement and steel in March, aiming at “stabilising the real estate market and the construction boom and to reduce the burden”, according to Arabian Business.com.
Steel prices in the UAE 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 earlier this month.
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.
