Steel has many advantages, the biggest being it is among the most important ingredients of construction.
Steel is a critical raw material for all infrastructure, development and construction around the world. Steel is a popular option for building due to its strength and ability to adapt. It is durable, can be recycled, is flexible and is also well-suited for regions such as Dubai that experience hot, humid temperatures.
"The Middle East market is witnessing an unprecedented economic boom, which is resulting in huge infrastructure expenditure. It would definitely rate among the top five consumers of steel," says Siddharth Balachandran, Managing Director, BUMGA Group of Companies.
"Marketplace participants are slowly beginning to understand the importance of technology upgradation, human capital upgradation and so forth. The market is slowly shifting from a change-resistant market to a change-friendly one and is beginning to mature in terms of basic business practices. Companies are increasingly investing in building up their knowledge base and enhancing intellectual capital. A lot of companies are also investing heavily in ensuring that a proper continuity plan is set in place," says Balachandran.
Major projects
Steel has become the ‘must have' material within the construction industry. It can be used as a standalone product or be combined with concrete in the construction of just about any man-made structure.
Many of the buildings in Dubai are steel-based — the major development projects at Dubai Festival City, Dubai International Airport, Burj Dubai and the metro rail project are just a few examples. It's a fact that the current boom within the construction industry has resulted in a high demand for steel.
Says Bob Webster, Managing Director of Mammut Building Systems, "The UAE is witnessing an unprecedented scale of activities in the construction sector where speed and time are of the essence. The use of steel accelerates the pace of construction and is ideal for low-rise structures, as is commonly seen in the UAE now and for high-rise structures — a definite future trend.
Advantage steel
"In other parts of world, steel is the preferred material for fast-track building of high-rise structures, particularly when combined with precast concrete floor and wall systems. The best days of steel in the UAE are yet to come," says Webster.
Steel's main advantage is its ability to be reused — it is a resource saver. More than half the steel we see around us is recycled from scrap such as cars and buildings. Another advantage with steel is that it can be repeatedly recycled and not lose its quality.
But in the construction industry, being recycle-friendly is not enough; building materials need to be eco-friendly as well. The UAE is realising the importance of using eco-friendly materials wherever possible when building.
"The municipal authorities are becoming more environmentally conscious with respect to building regulations," says Webster continuing, "for example, Dubai Municipality is progressively phasing out the use of polyurethane sandwich panels manufactured with ozone-depleting CFC or HCFC blowing agents such as 141b and insists on minimum values of insulation for such roof and wall panels to save energy."
"However, the production of concrete is very wasteful considering that water is a scarce resource. Yet, more cubic metres of concrete is currently being poured here than anywhere else on earth.
"European standards of ecologically influenced design and construction seem quite distant, even though there are some very praiseworthy projects that have kept ecological factors at the forefront of their concepts," says Webster.
Steel structures have low carbon footprints and are lighter than concrete frames so they need less foundation construction. Steel can also be fabricated offsite in a safer and healthier environment than other materials.
Scheduling advantages
Steel has scheduling advantages as well. It is a practical choice for large commercial projects and allows for small erectable sequences. A high load of concrete can be held by structural steel in the form of large-sized beams or columns.
"A steel building is much faster to construct than an in-situ reinforced concrete building and requires a smaller labour force for its assembly onsite.
"The strength-to-weight ratio of steel is also much higher than concrete, thereby allowing the structure of the building to take up relatively less space. This makes steel a very cost-effective solution for buildings that require large unobstructed spaces such as warehouses, supermarkets, showrooms and factories," says Webster.
Cellular beams
The kind of beams used also makes a critical difference in building construction. Cellular beams weigh 35 per cent less than wide-flange beams and are capable of carrying the same loads with the same span.
They are of a relatively light, resource-efficient design and support the functionality of the building beyond what a wide flange system would be capable of. They also reduce the amount of material and conserve energy during construction.
Price fluctuations
Steel may be popular, but like any other commodity, it is a slave to price fluctuations. Asim Siddiqui of Age Intrade LLC agrees. "The big worry at the moment is pricing. With the global steel industry experiencing an upward spiral, prices have crossed an all-time peak within the last few months.
"The GCC region is booming with construction activity and the recent upward demand in Europe has resulted in fuelling steel prices further," says Siddiqui.
Expensive or cheap, there is no doubting that the steel industry in the UAE is growing by leaps and bounds. There are a number of instrumental factors that have contributed to this growth.
"The vast numbers of projects that have been announced by the government have helped create a huge demand, which in turn is helping the market as a whole to consolidate, in a faster and more efficient manner.
The sheer magnitude of requirement is forcing all the industry participants to improve their efforts in fulfilling the market dynamics," says Balachandran.
Expensive steel prices in the UAE have affected the demand and in turn, the construction industry. The recent upturn in prices is an example of the demand-supply situation becoming slanted in favour of demand.
Trading hub
"The Middle East is mainly a trading hub, where most of the countries are net importers of bulk commodities such as building materials. The manufacturing base is miniscule in comparison. Hence local companies are exposed to the risk of volatility in international prices, which could result in pressure on the bottom lines of the local companies," says Balachandran.
"Also, the massive purchases by China played a major role in the bull run. The construction industry has been affected because the majority of industry players were not able to predict the timing of the rise in commodity prices, and it caught them unawares. It created a huge vacuum in their bottom-line as steel constitutes a major part of the cost estimation."
