Setting for hard times

It cost contractors Dh6,239 (US$1,700) for a tonne of reinforced steel (rebar) and close to Dh400 a tonne for cement when they went shopping this time last year. There was even a black market, as traders were willing to ignore government-imposed price restrictions and contractors were desperate to lay their hands on building materials.

However, with construction projects worth trillions of dollars being scrapped in the once red-hot Gulf construction market, the good times are over for cement manufacturers and steel traders.

Prices have plunged, with steel down almost 70 per cent in a year and cement down roughly 22 per cent. The decline in prices is now stabilising, but a sustained upwards price push in the second half of the year could only happen if the construction sector comes to life again, industry experts say. In the meantime, manufacturers are pinning their hopes on government support to remove price caps and control dumping from foreign firms, giving the market a chance to recover.