GulfNews reported that demand for concrete and reinforcing steel is expected to more than double in 2009 as over USD 1.8 trillion worth of construction projects flood the GCC. Concrete, reinforcing steel and stone cladding are in all in huge demand in the region as the Gulf becomes the epicenter of the world's most concentrated construction boom. However, figures show demand for construction materials will peak next year before dipping in 2010.
According to the report, demand for ready mix concrete across the Gulf is forecast to hit USD 8.6 billion in 2008. This figure will be more than double in 2009 to reach USD 18.7 billion before dipping to USD 15.5 billion in 2010.
It is a similar story for reinforcing steel. It is expected to reach USD 7.5 billion in 2008 and rocket up to USD 16 billion in 2009. But it will fall to USD 13.1 billion in 2010. Stone cladding is expected to reach USD 1.5 billion in 2008, USD 4.3 billion in 2009 and maintain a steady increase of USD 4.5 billion in 2010.
Mr Bernard Walsh MD of DMG World Media Dubai said that "The forecasts are based on the number of projects coming up. Therefore, the number of projects, at the stage where you need cement and steel, will have reduced in 2010. Stone cladding has a delay factor as it's used later on in the construction process. However, as new projects come up and orders for cement and steel are put in, demand could increase again after 2010."
Dr Kashif Naqvi senior procurement analyst at Al Habtoor Engineering Corporation said that "There is a shortage in the clinker and therefore suppliers are unable to produce the quantities. Demand has gone up but supply has gone down."
Mr Naqvi said that Al Habtoor has projects booked for the next 10 years and are specifically looking to import cement from Southeast Asia among other regions to try and keep up with demand. He added that "Now the outside sees the high demand in Dubai and so they are trying to raise their prices from around AED 14 or AED 15 to AED 18."
The top 5 biggest civil building projects currently under way in the Gulf are all in Saudi Arabia, the UAE and Kuwait with a combined value of USD 349 billion.
