Rebar prices rise marginally by Dh100 a tonne in UAE
Rebar prices in the UAE have increased marginally by Dh100 per tonne amidst a sharp rise in global steel prices in January.
Local steel is currently being sold at Dh1,950 to Dh2,000 per tonne depending on the payment process. The increase in local prices, compared to December 2009, is lower than the increase in global prices. International steel prices have gone up by around $40 (Dh146) to $50 per tonne during the same period.
A senior official of a local trading company yesterday told Emirates Business that local steel mills have not raised prices in tandem with international prices as domestic demand continues to remain weak.
"There has not been any upward movement in demand locally, especially in Dubai, as compared to the previous year, but Abu Dhabi is comparatively better.
"The situation in Oman and Bahrain is much better when compared with the UAE. However, demand in the GCC is similar to that of 2009 levels," said Rizwan Sajan of Danube Building Materials. International steel prices have been increasing due to a hike in raw material prices, he said.
"Of late, prices of raw materials have been increasing. However, no one is in a position to predict how steel prices are going to move during 2010," he added.
Bloomberg reported that Hyundai Steel, South Korea's second-biggest steelmaker has announced plans to raise product prices starting February 1 because of higher raw material prices.
"The price of H-beam, a key construction product, will rise 4.9 per cent to 860,000 won (Dh2,744) a metric tonne, while other beam products will gain 5.4 per cent to 780,000 won a tonne," said the report quoting an emailed statement from the Incheon-based company.
Global scrap prices increased to $385 a tonne from $300 a tonne in November. Global steel product prices also gained by between $50 a tonne and $70 a tonne in the period, it said.
Meanwhile, traders in the UAE said that rebar imports from Turkey in January have almost come to a standstill. "It does not make any economic sense today to import rebars from Turkey or any other market. Rebar in Turkey is priced at around $540 per tonne," said Kushal Khanna, Senior Manager, Emirates Rebar.
Imports to the UAE from Turkey, which stood close to 250,000 tonnes in July 2009 dramatically dropped to less than 100,000 tonnes by December. In December Turkey's steel bar exports reached their lowest monthly volume level for 2009, with a decrease of 8.26 percent compared to November.
According to a report by Steel Orbis, in December Turkey's total steel bar exports, including rebar, amounted to 516,141 metric tonnes, a drop of 22.66 per cent year-on-year and down by 8.26 per cent month-on-month. Quoting data provided by the Istanbul Mineral and Metals Exporters' Association (IMMIB), the report said the revenue generated by these exports totaled $241.6m, declining by 22.19 per cent compared to December 2008 and down 8.56 per cent month-on-month.
In the January-December period, Egypt was Turkey's number one steel bar export destination followed by the UAE with 1.71 million metric tonnes of steel bar exports.
UAE-based traders warned that it would be difficult for imports from Turkey to go back to previous levels unless the local prices and demand increase simultaneously. "We have stopped importing from Turkey for the time being. Locally produced steel is more than sufficient to meet demand here," said Sajan.
Local steel mills have not curtailed production while some of them are still undergoing expansion. Emirates Steel's output capacity is expected to reach three million tonnes a year by 2011. A senior company official recently told Reuters that it planned to approach banks in March to refinance a $1.5bn loan used for the first and second phase of its plant expansion.
Meanwhile, world crude steel production reached 1,220 million tonnes for the year 2009, showing a decrease of eight per cent compared to 2008. According to the World Steel Association, Chinese steel output amounted to almost 50 per cent of global output. It said China's crude steel production reached 567.8 million tonnes in 2009, up 13.5 per cent year-on-year, which was the highest yearly record in a single country.
China's share in global crude steel output continued to rise. It's steel production rose 46.6 per cent in 2009, up 8.9 per cent over 2008. Steel production declined in nearly all the major producing countries and regions in 2009. However Asia, in particular China and India and the Middle East showed positive growth in 2009. However, steel prices in China dropped the most in four months as inventories piled up and concerns grew that the government may curb lending
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.