Panic Selling Sends Steel Prices down 35-40% in the UAE
Steel prices in the UAE have plunged 35-40 per cent after surging by at least 90 per cent in the first half of this year on surplus stocks and panic selling by traders
After a 90% surge in the first half of this year on surplus stocks and panic selling by traders, steel prices in the UAE have plunged 35-40%. Trade sources said the price of Turkish and Qatar steel dropped from Dh6,000 per tonne to Dh3500 in the last two months.
Mahendra Patel, Chairman of Building Materials Trading Group, said steel prices which had been kept artificially high by speculators when demand far exceeded supply, have to come down to realistic levels.
“There had been heavy speculative imports of steel by even those who were not in the business. As a result of such hectic imports, availability of steel rebars increased substantially”. With slowing demand due to a fall in construction activities, these stockists, panicked and started to sell at lower prices. Furthermore, Turkish steel manufacturers also slashed prices overnight and shipped huge quantities to the region, further aggravating the oversupply situation.
Chaos has occurred as prices plunged by 35-40%. Shyam Bhatia, Chairman of Alam Steel, said steel prices which had been falling over the last two months looked set to rebound after the holy month of Ramadan. “The price of reinforcement bars which peaked at Dh6,000 per tonne in July has fallen to as low as Dh3,500 recently.
We feel that prices will rise past Dh4000 per tonne in the last quarter of this year.”
He said the GCC would import 6.75 million tonnes of rebar this year and the market was expected to grow to 8 million in 2009. “However, the last two months has seen a buying freeze by the major importers in region which in turn has led supplier markets like Turkey to lower production and in some cases even shut down their mills for early maintenance.
Regional mills have also seen their volumes drop by over 50% and have frozen their raw material purchasing.