Business | Construction
Prices of key construction materials rise over 25%
The recent study by the Dubai Chamber of Commerce and Industry shows that prices of construction materials are soaring again after a period of relative stability.
- By Irish Eden Belleza, Web Coordinator
- Published: 00:03 June 11, 2008
- Image Credit: Source: ME Steel
Dubai: The recent study by the Dubai Chamber of Commerce and Industry shows that prices of construction materials are soaring again after a period of relative stability.
This shows demand for construction materials has been growing faster than supply, causing shortages in some areas and subsequently affecting prices.
Steel, cement and aluminium are three key construction materials that have been greatly affected by the current situation.
In the Middle East, steel production increased by seven per cent to 16 million tonnes, but consumption remains high at an estimated 39 million tonnes, causing excess demand of almost 23 million tonnes.
Due to the high consumption, steel prices have increased sharply in the local markets, increasing on average 22 per cent in the first quarter of 2008 across the Middle East.
The study also shows that the average cement price in Dubai increased by more than 50 per cent in March, and other construction materials that use cement as a component such as concrete and ready-mix saw stiff price increases.
As most of the new construction projects in the Middle East are in the UAE, particularly Dubai, the cement market in the country is pressured to meet this huge demand.
Cement
Cement production in the UAE in 2007 was estimated at 13.2 million tonnes, but consumption was about 18.2 million tonnes and is expected to reach 23 million tonnes by 2010.
On the other hand, compared to other markets around the world and in the Middle East, Dubai ranks first in terms of aluminium price increase as on average, aluminium prices increased by almost 23 per cent in the first quarter of 2008 compared to the average price in 2007.
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