Building materials prices in Middle East witness 15% rise in April 2009

In line with this, Danube Building Materials, the leader in construction, building materials and shop fitting industries, has revealed its optimism about the positive effects of the major correction phase that is sweeping the entire Middle East construction market, which is an indication that the industry is reshaping to take on a stronger stance towards recovery.

Company officials also disclosed that they have observed increased buying activity within the building materials sector in April.

The price hike, which is expected to encourage a more upbeat trade atmosphere in the market, is the result of the increase in building material imports following a slowdown in regional orders from October 2008 to February 2009 due to overstocking.

According to the latest price indexes maintained by Danube, products whose prices jumped since last month include medium density fibreboards (MDFs), which currently wholesale at $220 per cu. m. from $200 in March; and white wood, which rose by 10% to $210 per cu. m. from $190. In addition, freight costs have also increased from $300 to $650 for a 20-feet container in March, while a 40-feet container now costs $800 from previous rates of $550.

"The current correction in the real estate and property sectors is driving the shift in the prices of construction materials, which will eventually lead to a healthier market with more stable growth opportunities in the future. As the market leader, we have identified that today's market scenario gives us an exceptional opportunity to supply our top-quality products to support the continuous construction of major projects and developments across the region. We are also anticipating further increases until prices reach a stable level."

said Rizwan Sajan, Chairman, Danube Building Materials.

Danube's price index also revealed that average rates for the most basic building materials are as follows: steel props at Dhs45 per piece, cement at Dhs16 per bag, clear float glass (6mm) at Dhs23 per sq. m., and aluminum profiles at Dhs19 per kilogram. A survey of the prices of imported wood products have also reflected a dip, with scaffolding planks sold at an average of Dhs55 per piece, while Red Meranti from West Malaysia selling at Dhs2,750 per tonne, European Whitewood at Dhs925 per cu. m., Russian Beech wood at Dhs2,750 per cu. m. and KINGPLUS Film Faced plywood at Dhs125 per sheet.

"Our recent foray into steel, aluminum and glass manufacturing puts us in a strategic position to maximise the movement in market prices of these products and thereby drive our growth amidst the challenges of the global economic crisis. Through our plans to further expand our operations and product offerings, we are hoping to do our part in pushing the growth of both the construction and real estate sectors," concluded Sajan.

Danube operates from its head offices in Dubai - a 285,000 square foot facility in Jafza north and 365,000 square foot area in Jafza south. The company offers top-quality products including medium density fibreboards (MDFs), plywood boards, timber, veneers, laminates, cladding, steel, kitchen and sanitary wares, glass, hardware, electrical, aluminum, doors, floorings, adhesives, ceilings, paints, edge bondings, fire solutions, and high quality construction tools.