Steel prices declined to their lowest level in the UAE local market. The price per tonne ranges between AED1,400 and AED1,600, down by a large margin compared with the real estate boom. In mid-2008 a tonne of steel went for roughly AED6,200.
Building materials traders and contractors say the steel prices in the local market have never witnessed such a decline. Even after the global financial crisis, prices fell from AED6,000 to AED1,800 at most.
The traders said that the prices dropping to the levels before the real estate boom in Abu Dhabi in 2005 is not linked to the local market, but to the global market. When oil prices fell to less than AED50, the costs of the industry and transportation declined, Aliqtisadi reports.
Steel prices recorded a decrease of 30 per cent during the last quarter of this year, compared with the same period last year, with prices ranging between AED2,100 and AED2,200 per tonne during 2014.
Traders do not believe that the decline in steel prices led to a noticeable drop in the construction cost in Abu Dhabi, especially with the high prices of some other materials, primarily cement. The cost of cement has gone up from AED220 per tonne to AED240.
It is noteworthy that the steel prices fell from AED2,100 per tonne at the beginning of this year to less than AED1,600 currently. Those levels are the lowest levels since 2005.