High stockpiles are predicted to compound the effects of declining construction activity

Steel prices in the Gulf are expected to slide in the first quarter of this year, after bouncing back from a fall last autumn.

Reinforcement bar prices stood at $760 per tonne in January 2008, before more than doubling to $1,560 last summer as demand for the product grew enormously to keep pace with the booming construction industry, especially in Dubai.

But the figure fell to $460 in November as the impact of the global downturn took hold, before prices recovered 5% to $485 this month.

Now a steel tracker service has said that the amount of rebar stockpiled, along with falling worldwide demand, will cause prices to decline again over the next three months.

MeSteel said that only in China has demand picked up, with the downturn in the UAE one of the main reasons for the expected fall in prices.

The chief operating officer of Abu Dhabi-based firm Amana Contracting & Steel, Riad Bsaibes, agreed that prices are likely to fall and added: “A global slowdown in activity, along with a stockpile in inventory, will put downward pressure on prices.”