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Steel prices rise 14pc in July

ABU DHABI - The prices of iron and steel products have increased by 14 per cent while cement blocks rose by 42 per cent during the month of July.

"A large number of construction projects have been launched in Abu Dhabi, which have contributed to the current surge in prices of building materials," according to a report by Abu Dhabi Planning and Economy Department (DEP).

"The building materials price index showed that average price of Korean steel used for bridges rose in July to Dh6,250 per metric tonne from Dh5,500 a metric tonne in June, an increase of 14 per cent. Similarly, price of flat steel surged 12 per cent from Dh5,490 per tonne in June to Dh6,150 per tonne in July," the report said.

Cement price: The report also noted that average price of cement block saw a hike of 42 per cent last month for the first time this year. A package of 1,000 blocks went up from Dh1,620 in June to Dh2,300 in July.

Coal tar: Average price of a tonne of coal tar (60/70) jumped 10 per cent to Dh420 in July from Dh382 in June.

The report said prices of glass, wood and cable and wires remained stable in July.

The price index is released by DPE to protect the construction sector against any malpractices in the market for materials.

In a preface to the statistical report, DPE said that the economic boom has particularly been felt in Abu Dhabi. The construction industry have got a large number of projects.

The rise in oil prices and the depreciation of the US dollar over the past few years also contributed to the onset of a price spiral in all commodities, including the prices of building materials.

On the domestic side, the current real estate boom in Abu Dhabi spurred demand for building materials, with data showing the value of private construction projects in Abu Dhabi to hover around Dh880 billion between 2004 and 2007.

The emirate is expected to attract another Dh200 billion in construction investments this year, which is certain to widen the gap between demand and domestic production of construction materials, necessitating resort to foreign markets, and resulting in substantial rises in the prices of construction materials as was clearly observed in the first half of this year.

The month of June 2008 saw the prices of the different types of building materials in Abu Dhabi rise between three per cent to 53.3 per cent, compared with the price levels in May 2008.

The prices of some materials almost doubled during the first half of this year: reinforcement steel for instance surged 91 per cent, while other materials such as white wood lumber edged up slightly by only 2.9 per cent.