Oversupply drives down steel prices



An abundance of supply is driving down steel prices in the UAE.

Political turmoil across North Africa has also meant some shipments of reinforcing steel, known as rebar, have been delivered to the UAE instead.

That has helped to lower prices, said Rizwan Sajan, the chairman of Danube Building Materials. Prices for rebar steel have fallen from Dh2,900 to Dh2,600 a tonne in recent weeks, Mr Sajan said.

"Abu Dhabi is wisely taking advantage of this sudden drop in prices to help supply the demand for steel products in the capital's current construction projects," he said.

Prices have been stabilising in recent months and are far below the Dh6,000 a tonne from the building boom in 2008, Mr Sajan added.

But subdued demand more than unrest in the region is affecting prices, said Khawaja Zulfiqar, the marketing consultant for Attieh Steel. Turkey is the main exporter of steel to the Middle East.

"The UAE is a main hub for steel" for the region, keeping local supplies plentiful, Mr Zulfiqar said.

The unrest in Libya and Egypt has been offset by projects in Qatar, Oman and Kuwait, he added.

The construction slowdown in the UAE has affected all aspects of the steel business, local executives say.

"There is no firm purchase requirement in the UAE," said Naik Zahoor, the commercial manager of Emdad Steel, a stockholding company based in Abu Dhabi.

The earthquake and tsunami in Japan would likely affect supplies of structure steel and plates more than the political unrest in the region, Mr Zahoor said.

His company imports between 5,000 and 8,000 tonnes of steel from Japan a year, he said.

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