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UAE traders resume steel imports as stocks decline

posted on 21/05/2009: 3064 views



Steel traders in the UAE said they have resumed imports as stockpiles have almost come to an end. New import orders after a gap of almost six to seven months are being made at a much lower rate compared to the last year's orders.

However, there are mixed reports about the way the prices are moving with traders saying there is an upward movement of about US$40 (Dh147) to US$50 compared to prices last week; whereas analysts have predicted stable prices.

According to traders, prices of structural steel when compared to last month have increased by almost US$100 as mills are gradually increasing the rates due to growing demand.

Booking prices of structural steel currently stand at about US$585 compared to US$520 a couple of weeks ago and US$480 a month ago, said one trader. A leading trader told Emirates Business that mills had already increased the prices by about $30 since last week.

KG Praveen, Senior Sales Manager at Al Rostamani Building Materials, said the indicators are for prices to increase marginally during the next two weeks. "Currently the booking price for structural steel is around Dh580. "About two weeks ago, it was priced at around US$520. Today the booking prices have increased by about US$40-50. If the demand increases, we can expect the mills to raise it further," he said.

Last year Al Rostamani Building Materials imported 150,000 tonnes of steel – both structural and rebar

Louis Dante, Marketing Manager at Al Nimr Steel Trading speaking during the Steel and Cement show at the Sharjah Expo yesterday, said that his company has placed fresh import orders for the first time since August. Last year, Al Nimr Trading had a turnover of almost Dh500 million, an increase of almost 25 per cent compared to 2007.

"The stocks in the UAE are almost coming to an end. We are already witnessing some shortage in certain sections. Unless fresh orders are placed now, the shortages could increase resulting in a further raise," said Dante. Al Nimr Steel imports steel in bulk and distributes to all GCC countries and markets such as Iran, India, Pakistan and some countries in Africa.

"The GCC market has not been affected as badly as the slowdown has hit the other parts of the globe. There is a lot of construction activity going on here. The market in Qatar and Saudi is doing well. Within the UAE, there have been some very good enquiries from Abu Dhabi," said Dante.

"Demand is consistently building up and we are expecting a small revival. Especially, since nobody has imported for the past four to five months and the existing stocks have decreased.

"The mills know it very well. They know that fresh orders have to be placed and thus they have been playing up the prices. It has already increased by about US$40 from last week and is expected to increase by another US$40 to US$50 during the next few weeks," he added.

"We are looking for better prices because what we are selling today – about 40,000 to 50,000 tonnes of steel – is what we purchased at peak prices last year, which was about US$1,300 to US$1,500," he said, adding that the demand would, however, depend on the projects.

Meanwhile, Karel Costenoble, Manager at Mesteel.com – a web portal dedicated to steel analysis – said according to his information prices have not increased much.

"Beams today are selling at US$500 to US$550 CFR, especially, from Korea and Western Europe and it is not going up. Whereas plates range from US$470 to US$500 CFR in Dubai – especially from Ukraine and the Far East."

However, he agreed that there is a shortage in some items. "There are some shortages. However overall, there are still substantial stocks available. Imports now are being placed in small quantities," said Costenoble.

According to Dante, the demand depends on the new projects and the status of the existing projects. "We should also keep in mind that several projects have been cancelled or put on hold. We need to know the projects that are going ahead. Once we get a clear picture we well be able to estimate the demand," he said. According to Praveen, the increase is in anticipation of a rise in demand. "Stocks are coming to an end. Although most of the projects are suspended and very few projects are on, the indications are that certain sections of structural steel in the market are falling short," he said. – Emirates Business 24|7

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