Friday, May 23, 2008
Gulf News
Dubai: Demand for concrete and reinforcing steel is expected to more than double next year as over $1.8 trillion worth of construction projects flood the GCC.
Concrete, reinforcing steel and stone cladding are in all in huge demand in the region as the Gulf becomes the epicentre of the world's most concentrated construction boom.
However, figures show demand for construction materials will peak next year before dipping in 2010.
According to the report, demand for ready-mix concrete across the Gulf is forecast to hit $8.6 billion this year at today's prices. This figure will more than double in 2009 to reach $18.7 billion before dipping to $15.5 billion in 2010.
It is a similar story for reinforcing steel. It is expected to reach $7.5 billion this year and rocket up to $16 billion in 2009. But it will fall to $13.1 billion in 2010.
Stone cladding, in slightly less demand than concrete and steel, is expected to reach $1.5 billion this year, $4.3 billion in 2009 and maintain a steady increase of $4.5 billion in 2010.
"The forecasts are based on the number of projects coming up. Therefore, the number of projects, at the stage where you need cement and steel, will have reduced in 2010," said Bernard Walsh, managing director for dmg world media Dubai, organisers of The Big 5, the region's largest trade show in the construction field. "Stone cladding has a delay factor as it's used later on in the construction process.
"However, as new projects come up and orders for cement and steel are put in, demand could increase again after 2010."
Dr Kashif Naqvi, senior procurement analyst at Al Habtoor Engineering Corporation, said: "There is a shortage in the clinker and therefore suppliers are unable to produce the quantities. Demand has gone up but supply has gone down."
Naqvi said Al Habtoor has projects booked for the next 10 years and are specifically looking to import cement from Southeast Asia among other regions to try and keep up with demand.
No effect
Naqvi also said that the recent MoU signed between the Ministry of Economy and the Cement Producers Group to reduce cement prices and increase capacity, have not affected the company.
"No it hasn't affected us. We're almost hitting June and still nothing. Even the government reduced import duties from six per cent to four per cent but it has not been effective."
"Now the outside sees the high demand in Dubai and so they are trying to raise their prices from around Dh14 or Dh15 to Dh18," Naqvi said.
The top five biggest civil building projects currently under way in the Gulf are all in Saudi Arabia, the UAE and Kuwait with a combined value of $349 billion.
Gulf News 2008. All rights reserved.
