Steel prices on an upward trend
Steel prices in Bangladesh have trended upward, with millers raising tariffs following the continued spiral of scrap in the international market due to a recovery in demand and limited supply.
Over the past year, the price of steel has risen 38 percent in Bangladesh, which will increase the cost of building bridges, culverts, bridges and houses, according to people in the industry.
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The retail price of grade 60 MS (mild steel) stood at Tk 75,700 per ton yesterday, up from Tk 73,000 two months ago and Tk 55,000 last year, according to data from the Trading Corporation of Bangladesh.
The price of scrap metal, which is used to make steel products, has increased in the international market due to the limited supply in the world after the drop in production in Japan and in European countries due to the pandemic of coronavirus.
At the same time, demand picked up after economies started to operate at full capacity, in line with the easing of restrictions on coronaviruses, pushing up the price of scrap metal in most markets.
âThe impact of rising scrap prices globally is being felt in the local market in Bangladesh,â said Tapan Sengupta, deputy general manager of BSRM, the largest steel maker in Bangladesh.
If manufacturers import waste at the current rate, the cost of the finished product would reach 83,000 Tk per tonne, he said, adding that millers were selling MS bars below the cost of production to protect their businesses.
According to people in the industry, the cost of scrap metal is $ 580 per tonne, up from $ 300 to $ 350 in October of last year.
About 70 to 85 percent of the 6.5 million tonnes of smelting scrap used by the domestic steel industry is imported, while the rest is produced locally.
Before the pandemic, scrap metal was reportedly imported from the United States, Canada, Australia, South Korea and European countries. Now, millers are purchasing the key raw material from the United States only due to lower production in other supply destinations.
In the first months of the pandemic, scrap metal production declined as the auto and shipping industries, which generate much of the scrap metal as a by-product, shut down, Sengupta said.
As a result, there is a global scrap metal crisis. In addition, the cost of freight has increased by over 300 percent over the past year.
Mir Nasir Hossain, former chairman of the Bangladesh Federation of Chambers of Commerce and Industry, said the rise in the price of MS rod will increase the cost of building bridges, culverts and overflights by about 15%.
As a result, local construction companies will be in trouble as procuring entities do not adjust prices for projects lasting less than 18 months, he says.
“We have asked the Ministry of Finance to adjust the cost of the project as the price of raw materials increases.”
Kamal Mahmud, first vice president of the Bangladesh Real Estate and Housing Association, said rising steel prices would increase the cost of housing projects by 10 percent.
“Construction will be affected due to the continued increase in the price of raw materials. But builders do not have the option of charging customers more since they have already signed agreements.”
He alleged that the steelmakers were raising the price under the pretext of raising scrap rates.
According to Md Shahidullah, secretary general of the Bangladesh Steel Manufacturers Association and managing director of Metrocem Steel, said in the past that India made steel from iron ore instead of using iron ore. waste.
“Now the country is buying waste on the international market, and this has had a significant impact on the price globally.”