DUBAI,13 March 2008 — Sheikh Mohammed ibn Rashid Al-Maktoum, vice president, prime minister and ruler of Dubai, has yesterday issued a decree exempting cement and steel from customs fees until further notice, and to allow all the contractors and real estate developers to import these two materials with no restrictions.
The verdict aims to control the raising prices of construction supplies.
According to figures, over the past eight months cement prices have risen by at least 40 per cent, while steel prices have increased by 25 percent. This has caused panic in the local realty market that affected different other sectors. The new decree is a great relief for builders and contractors.
There were indications that cement and steel prices will increase further in the UAE by this month.
Dubai is witnessing a construction boom and cement and steel make up 30 percent of construction costs, which means a loss of millions of dollars for all projects. Rising costs could also force investors to look to other Middle Eastern countries for business opportunities. The main people investing in the UAE are the Saudis, Kuwaitis and Iranians.
According to Realty Research Professionals, Kuwait and Saudi Arabia are less expensive markets than UAE.
In December 2007, ArcelorMittal, the biggest steel producer in the world, said that it would raise the price of its long steel products in the Middle East region by $30 per tone from Jan. 1, 2008. It said the price rise would be applied in the region around the Black Sea and the Mediterranean Sea, the Middle East and Turkey.
Industry experts say that high insurance, fuel and shipping costs and the construction projects boom in Saudi Arabia as well as the reconstruction projects in Iraq are also reasons for high cement prices.
