Soaring cement prices worry contractors

Soaring cement prices worry contractors
Published: 15 April 2004

The price of cement in UAE has hit a new high of Dh260 per tonne as against Dh190 per tonne same time last year. The rise in cement prices has been attributed to growing demand from the construction sector. Prices had touched a peak of Dh230 per tonne in February this year. T. Siddiqui, Project manager of Petron Emirates Contracting Company, said: ’There has been rise in cement prices as against the corresponding year and contractors are not feeling comfortable as Dubai is also a re-export hub and hence prices are fluctuating rapidly. Over the last one and half years, prices have surged approximately 35 per cent and by-products like ready mix concrete have registered a further rise of 50-52 per cent in recent days. Ready mix concrete is currently quoted at Dhs 193 a cubic metre as against Dh127 per cubic metre last year. The rise in ready mix concrete should have technically registered a growth of 15-20 per cent. However, the price rise in ready mix indicates that manufacturers are cashing on the rise in cement prices and the current construction boom.’

A leading cement supplier, who wished to remain anonymous, said:’ UAE does not have enough local cement plants to take care of the increase in local demand from construction projects. When demand exceeds supply, prices are bound to get volatile as everybody would like to cash in on the opportunity. The industry believes trend in prices will be bullish. The contractors are wary of the cost of raw materials, such as steel and cement, which keeps fluctuating. Now contractors fear UAE cement suppliers are holding back supplies to cash in on the opportunities they expect to arise in Iraq. Contractors have been forced to absorb the price rises, as many would have committed themselves through long-term supply tenders.