Cap on steel prices ruled out

Prices for a tonne of steel currently range from Dh5,400 to Dh5,700. (CRAIG SCARR)

The UAE government has ruled out any intervention in the markets to curb the price of reinforced steel, which is on an upward spiral.

Mohammed Abdul Aziz Al Shehi, Undersecretary of the Ministry of Economy, told Emirates Business that the ministry will not move to fix the price of a tonne of steel, which currently ranges from Dh5,400 to Dh5,700 according to the country of origin.

He added that the steel price hike is not a local or regional occurrence but a global phenomenon.

"We will not fix the prices since they change each day, and price-fixing will lead to an absence of steel from the markets, which would be very damaging to the real estate and infrastructure projects underway in all emirates," Al Shehi said

The Undersecretary said the government has already exempted steel from customs tariffs and there were no taxes imposed on the commodity either. Companies and traders are free to import steel and there exists no monopoly in the market as well. Under the circumstances, then, the major reason for the price rise in the country was a lack of local manufacturing facilities, he said. However, there are plants currently under construction, he added.

The shortage of cement will disappear in a few days, Al Shehi said, and the ministry will this week announce a list of 30 suppliers of cement nationwide who are selling at Dh18 a bag. Moreover, cement is sold for Dh16 a bag at cement factories and there is no need for contractors to buy at higher prices since availability is not a constraint at the factories, he said.

The ministry will carefully monitor new dealers all over the country and scrutinise their receipts and bills of sale.

Buyers will be sold 50 bags at a time and the ministry does not mind if consumers buy the amount they need in stages, Al Shehi said.

Large contracting companies can buy directly from the plants, he said. Ras Al Khaimah, Ittihad and Gulf Cement factories will push their production to the maximum in order to increase supply and reduce prices. Also, huge amounts are being imported from India, Iran and Pakistan, he added.

Meanwhile, big contractors in Abu Dhabi continued to complain about the growing shortage of cement. According to some who spoke to Emirates Business, there exists a black market for the material where a bag of cement is sold for Dh22 to Dh25.

They also said the price of a tonne of reinforced steel in Abu Dhabi has hit Dh5,700, which is expected to go up to Dh6,000 in a few days time.