Contractors are hit by 40% hikes on materials prices
Copper and aluminium prices are soaring by the week as demand goes through the roof in Dubai
Contractors are being hit by massive increases in the cost of copper and aluminium, which is sending the cost of construction soaring by up to 40%.
MEP firms are bearing the brunt of the price hikes, just as many residential towers under construction enter their mechanical and electrical phases.
“Copper has risen in price in the past four months by around 40%,” said Rajkumar Paryani, general manager of Mac Al Gurg, a Dubai-based building materials supply firm.
This month, copper set a new record of US $6,110 (AED22,440) a tonne on the London Metal Exchange, while Zinc hit an unprecedented $3,000 a tonne and Nickel reached its strongest price since 1989.
“We thought it had hit a ceiling about three months back,” added Paryani. “But the price is rising literally every week by a couple of hundred pounds [sterling].
“Two years’ ago we were buying copper at about $1,594 a tonne. Now we’re paying about $6,198 a tonne.”
Siddharth Balachandran, director of Dubai-based building materials suppliers, Bumga Group, confirmed that aluminium prices have also risen dramatically:
“We’ve seen almost a $600 jump in price-per-tonne for aluminium in the last six months.”
According to Cheriaan Mathews, project and maintenance manager, Emirates Group, contractors will simply have to bear the loss:
“It works on supply and demand — the rise in copper prices is really being felt in Dubai as there’s such a big demand for work here.
“In the FIDIC contract a contractor has to anticipate these before they submit a price.”