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UAE industry expects steel prices to decline further |
| WRITER |
administrator |
DATE |
2009-01-19 08:12:22 |
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UAE industry expects steel prices to decline further
Monday, 19 Jan, 2009
Gulf News citing industry officials reported that the price of steel is expected to decline further in the first quarter of 2009. Officials said that a global slowdown in industrial activity along with a stockpile in inventory will put a downward pressure on prices.
Statistics however showed that prices have increased slightly from November 2008 to January 2009.
According to Me Steel, the price of reinforcement bars per tonne was at USD 760 in January 2008, rising to an astounding USD 1,540 in July 2008 and then dipping to USD 440 by November 2008. As of January 2009, the cost of reinforcement bars is at USD 485 per tonnes
Mr Karel Costenoble GM of Me Steel said steel prices will remain the same or may go down in the next two quarters. He added that the demand for steel worldwide has declined except in China, where prices are slightly higher. He believes the number of construction projects in the UAE will decline by half this year.
Mr Rizwan Sajan chairman of Danube Building Materials said he did not expect any major fluctuation in steel prices in the next three to six months. However, he added that despite volatility in steel prices last year, 2009 can be a good year for construction companies, who can take advantage of lower steel prices. He hopes construction companies will continue projects till 2010.
But Mr Riad Bsaibes CEO of Amana Contracting & Steel buildings, disagreed saying that that even though construction companies can take advantage of lower material prices, the effects of the credit crisis will eventually determine whether construction projects will move forward. He said that "Even if you are getting a great discount, if you don't have cash, things don't go forward. The ability to access funding for projects is very important." He added that this year will be a less volatile one for the steel industry but prices will continue to decline in the first quarter.
Mr Bsaibes attributed this to two reasons "A global slowdown in global activity, along with a stock pile in inventory will put downward pressure on prices." He said the main drivers for the steel industry will be the continued consumption of inventory locally and increased activity of the construction industry worldwide driven by stimulus packages announced by the US, China and EU.
Sourced from Gulf News
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