200% increase in metal prices for the hardware industry in the UAE

Specialists and officials of companies and laboratories specializing in the metallurgical and mechanical industries confirmed that the prices of metals for the hardware industry, led by nickel and stainless steel, increased by up to 200% due to rising prices of raw materials and energy . , as well as rising transportation costs, noting that demand is currently marking a decline in consumer reluctance due to high prices, despite manufacturers lowering profit margins, which is putting pressure on existing industrial investments.

They noted that fluctuations in raw material prices for metals are continuing and taking on an increasing curve, in connection with the continuation of the “Russian-Ukrainian” geopolitical crisis (as Russia’s share is 17% of most nickel production well. in the world), in addition to the emergence of epidemiological indicators of Corona virus in major global supply markets, compared to the increase in global industrial demand for raw materials.

Nickel prices

On March 8, nickel metal prices witnessed an unprecedented rise, after crossing $ 103,000 per tonne, before falling back and closing at more than $ 82,000, an increase of more than 50% in one day, The previous record level did not exceed $ 54,000, according to indicators on the investment site, which showed that the price of nickel continued to fall until it reached a level of about $ 33,000 per tonne last week, but nevertheless it remains higher. higher than its level in November 2021., which ranged between 19.7 thousand and 21.5 thousand dollars per ton, more than 53%.

Nickel, which is the main commodity for the production of specialized production minerals according to the American Geological Society, is used in the production of more than 300,000 products worldwide, including coins, cooking utensils, aircraft engines, batteries, electronic chips, cell phones. communication equipment, electronics, military industry, defense, advanced technology and all industries.Which requires metal that is resistant to corrosion and corrosion and can withstand temperatures up to 1000 degrees.

And the Bloomberg agency showed that one of the most important reasons for the “crazy” increase in the price of nickel is that electric car manufacturers increased demand for it to record levels, as sales of electric car companies increased by 62% during the second period. half of 2021, to reach 5.84 million cars, pushing it to increase demand for the metal that makes it possible to produce its own cars.

industrial investments

International Sales Director at Tech Pro Group for the production of digital industrial equipment in Dubai, who operates with artificial intelligence, engineer Ahmed Amouri, considered the increase in the price of metals globally, especially that it is one of the primary goods for production. of specialized metals, caused the company’s production costs for specialized industrial equipment to increase by 25%, reflected in the reduction of the profit margin in an effort to maintain the company’s sales.

Speaking to Al Vision, he pointed out that the company’s sales of specialized industrial equipment within the UAE fell 15% last year, indicating that industrial investment is witnessing a relative decline due to high creation costs of industries.

He stressed that the company’s sales exceed one million dollars a year, but the continued rise in prices of metals and commodities used in the production of digital industrial equipment, such as electronic chips, will be directly reflected in the prices of industrial products. , expecting further growth in the coming months.

Continuing to grow

The owner and general manager of Al Qimma factories for the production of kitchen equipment and restaurants in Sharjah, Alaa Mohammed, said that the price of the “stainless steel” plate for the production of industrial equipment, increased from 150 dirhams about a year ago to about 460 dirhams today, in addition to increasing shipping costs by more than 500% in Some of the world’s leading manufacturing countries.

He noted that some types of stainless steel tiles are not available in the market, which increased the prices available in the country, so the sudden rise in the price of primary metals globally over the past month indicates the possibility of rising prices. stainless steel. more than 200% compared to the previous period due to the consequences of global and geopolitical health crises.

global crisis

On the other hand, the director of the “Al-Riyada” factory for production specialized in the production of metal equipment in Ajman, Khaled Mohammed, expected that the prices of the main raw materials for production in the company, especially stainless steel, would witness an increase of further in light of the prolongation of global crises and rising prices of primary and base metals for production globally, such as nickel.

He said that the costs of creating most commercial projects that depend on metal equipment have increased by 200% due to a number of factors, where the main ones are the lack of imported equipment in the market, increasing domestic demand, rising prices in supplying countries. , rising transportation costs, high raw material prices, in addition to high energy.

He stressed that the high volume of demand, in contrast to the limited availability of equipment, was an obstacle for the owners of new projects, which led to extremely high prices for some specialized equipment, which was also reflected in the high prices. of equipment. in the used market.

synchronous lifting

For his part, the director of the Al-Talib Aluminum Factory, Ahmed Abdulaziz, said that fluctuations in metal prices have led to a gradual decline in demand of up to 30% since the beginning of this year, stressing that most traders do not expect the cost of business and are trying to get competitive prices in the market, which is almost impossible at the moment, as most companies have reduced profit margins to maintain business continuity, in light of unprecedented price increases.

He noted that the high cost of raw materials put pressure on the profit margins of industrial companies, to cause the price difference between the contract value and the price of materials for implementation, noting that prices are rising due to the severity in global growth. health or geopolitical crisis.

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