Saturday, May 09, 2009
Gulf News
Dubai: The prices of various building materials in the Middle East have risen by as much as 15 per cent in April 2009 as compared to the first quarter, with the price of steel witnessing the steepest hike from $430 to $500 per tonne, according to a report.
The price hike, which is expected to encourage a more upbeat trade atmosphere in the market, is the result of the increase in building material imports following a slowdown in regional orders from October 2008 to February 2009 due to overstocking.
According to the latest price indexes, products whose prices jumped since last month include medium density fibreboards (MDFs), which currently sell wholesale at $220 per cubic metre, from $200 in March; and white wood, which rose by 10 per cent to $210 per cubic metre from $190.
Freight costs have also increased from $300 to $650 for a 20-feet container in March, while a 40-feet container now costs $800 from previous rates of $550.
"The current correction in the real estate and property sectors is driving the move in the prices of construction materials, which will eventually lead to a healthier market with more stable growth opportunities in the future," Rizwan Sajan, chairman of Danube Building Materials, said on the current market situation.
"As the market leader, we have identified that today's market scenario gives us an exceptional opportunity to supply our top-quality products to support the continuous construction of major projects and developments across the region. We are also anticipating further increases until prices reach a stable level."
In line with this, Danube Building Materials, a leader in construction, building materials and shop fitting industries, has revealed its optimism about the positive effects of the correction phase that is sweeping the entire Middle East construction market.
This is an indication that the industry is reshaping to take on a stronger stance towards recovery. Company officials also disclosed that they have observed increased buying activity within the building materials sector in April.
It's price index also revealed that average rates for the most basic building materials are as follows: steel props at Dh45 per piece, cement at Dh16 per bag, clear float glass (6mm) at Dh23 per square metres, and aluminium profiles at Dh19 per kilogram.
A survey of the prices of imported wood products have also reflected a dip, with scaffolding planks sold at an average of Dh55 per piece, while Red Meranti from West Malaysia is selling at Dh2,750 per tonne, European Whitewood at Dh925 per cubic metre, Russian Beech wood at Dh2,750 per cubic metre and KINGPLUS Film Faced plywood at Dh125 per sheet.
"Our recent foray into steel, aluminium and glass manufacturing puts us in a strategic position to maximise the movement in market prices of these products and thereby drive our growth," concluded Sajan.
Gulf News 2009. All rights reserved.
