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Prices of building materials may up 5pc in third quarter

DUBAI — A five per cent rise in the prices of building materials such as steel is seen for the third-quarter of the year on the back of strong demand, record oil prices and rising freight charges, said a company engaged in the construction, interior decoration and shop-fitting industry.

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The price of steel doubled to Dh5,509.65 ($1,500) last month from Dh2,571.17 in January, according to Danube Building Materials FZC in a company statement. It added that prices of wood products such as timber also went up by over 25 per cent during the past three months.

It added that the film-faced plywood now costs Dh130 per piece from Dh105 a few months earlier while whitewood prices have jumped 20 per cent to Dh1,100 per cubic metre and those of aluminium rose by 23 per cent in the first-quarter from a year ago. The price of red meranti advanced to Dh3,305.79 per tonne from Dh2,571.17 per tonne.

"Danube predicts prices to continue rising until a drop in oil prices or the increased availability of freight shipments," the statement said.

Rizwan Sajan, the chairman of Danube, said the continuous growth in the prices of core building materials, which already surged 10-15 per cent earlier this year, would adversely affect the construction industry.

Danube has announced its foray into the steel production with an investment of Dh200 million, and has plans to invest Dh50 million into the manufacturing of aluminium and glass products. The company has already strengthened its presence in the UAE by investing Dh80 million into new facilities in Ras Al Khaimah and Ajman.

"Amidst the widespread need for high quality core building materials, our focus is to invest in multiplying our resources and enhancing our production outputs, with an ultimate goal to placate the rising prices of these valuable supplies," Sajan said.

jose@khaleejtimes.com