October 07, 2008

Abu Dhabi to increase cap on cement prices - Report

According to a source at the ministry of economy in Abu Dhabi, the price cap on cement is expected to be officially raised this week to around AED 300 per tonne. The current cap, which stands at USD 80, has seen cement and ready mix suppliers pushing up their prices on a weekly basis over the past couple of months.

This follows recent reports in Construction Week, where contractors and material suppliers have voiced their concerns about the cap and the need for its removal in order to bring back a balance to the market.

Mr Chris Lobel GM of Conmix said that "At the moment, the cap is still in place but it will probably be raised this week to about USD 81.7. I am not sure if it will go higher at a later stage, but this is what we know so far. We are expecting the new capped price to be about USD 98. And I don't see why that shouldn't be the case as some of us are still buying cement for more than that amount."

Cement prices have escalated by more than 30% over the past few months with many of the biggest contracting names in the country alleging that cement prices are being manipulated by a cartel formed by the cement suppliers within the industry. However, cement companies have dismissed the allegation.