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Wed 23 Jul 2008 04:00 AM

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Steel soaring above inflation rate

Steel prices in Abu Dhabi soared more than 20 percent in April from the month earlier as the rising cost of building materials fuels inflationary pressures across the Gulf, according to official data released in June.

Steel prices in Abu Dhabi soared more than 20 percent in April from the month earlier as the rising cost of building materials fuels inflationary pressures across the Gulf, according to official data released in June.

In the UAE capital Abu Dhabi, the cost of flat steel from Turkey rose 28.9 percent in April to 4,450 dirhams ($1,212) per tonne, compared with 3,450 dirhams per tonne in March, data from the Abu Dhabi Department of Planning and Economy (DPE) showed.

Flat steel prices soared 58.9 percent compared with April 2007, the data showed.

The price of other varieties of steel also climbed in April, with angled steel from Korea jumping 36.6 percent from March to 4,400 dirhams per tonne, the department said in a monthly report.

Price controls on building materials are one way Gulf Arab governments are trying to control inflation, which surged to 11.1 percent in the UAE last year, the highest in at least 20 years. Abu Dhabi inflation was 11.7 percent in 2007.

The UAE ordered a country-wide lifting of customs duties on cement and steel in March, aiming at "stabilising the real estate market and the construction boom and to reduce the burden on contractors".

Qatar, the world's biggest exporter of liquefied natural gas, also said earlier this month it would freeze the price of steel and cement for three years to tackle inflation that hit almost 15 percent in the first quarter.

In Abu Dhabi, the cost of Portland cement held steady in April from the month earlier at 440 dirhams per tonne, while the price of lime imported from Oman soared 127 percent to 850 dirhams per tonne, the data showed.

Aldar Properties, with about $65 billion worth of projects in the pipeline, is spearheading the Abu Dhabi's drive to develop residential and leisure districts, including a Ferrari theme park.

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