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Sun 20 Mar 2011 07:44 PM

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Steel prices fall 10% as uprisings cause supply glut

Danube Building Materials chief says UAE steel demand 'dismal' this year compared to 2010

Steel prices fall 10% as uprisings cause supply glut
Steel prices in the UAE have dropped more than 10 percent in March due to a supply glut caused by the Arab uprising. (Getty Images)

Steel prices in the UAE have dropped more than 10 percent in March due to a supply glut caused by the Arab uprising, a leading industry official said on Sunday.

According to Rizwan Sajan, chairman of Danube, one of the largest building materials suppliers in the UAE, prices have slumped from AED2,900 per tonne to AED2,600 per tonne.

"The drop is the result of a supply glut caused by the continuing political unrest in some countries in the Middle East and North African region," he said in a statement.

"The situation has driven steel suppliers to drop off their products in safer countries in the region, which has created an oversupply of steel," he added.

He also cited recent industrial reports showing that the UAE's steel market remained flat despite signs of marginal improvement in demand.

Reports for the first quarter of 2011 have also reflected a "dismal demand for steel" compared to 2010, he added.

Sajan said that Turkey, which is the main exporter of steel to the region, had been experiencing difficulties in exporting to countries that are currently under political siege and unrest.

"Because of this, the excess supplies have found their way to safer Gulf countries - forcing a drop in the prices," he said.

Sajan added that Abu Dhabi was reportedly taking advantage of the drop in prices with a continuous demand for steel products as construction activity in the UAE capital and the rest of the northern Emirates have created a demand for more than 250,000 tons per month.

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