Scarcity of scraps prompts rise in MS rod price

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Syeda Rizwana Hasan

FE Report
Prices of non-grade mild steel (MS) rod have increased by more than 10 per cent to Tk 44,000 a tonne in the local market over the past few days mainly because of the rise in the prices of ship scraps, manufacturers have said.
They said the prices of old-ship scraps have increased more than Tk 4,000 a tonne over the last few days against Tk 34,000 a tonne earlier, with the price now coming to Tk 38,000.
"We've raised prices of MS rod simply because of the rise in the prices of ship scraps," Md Bashir Ullah, general secretary of Bangladesh Steel Mill Owners Association, said.
The ship breakers have stopped procurement of old ships for more than six months due to legal complexities.
Zafar Alam, president of Bangladesh Ship Breakers Association said: "Import of old vessels has remained almost nil for more than six months. This has forced us to raise the prices of scraps."
Mr Zafar hinted that the prices of ship scraps might rise further as there are limited stock of scraps.
However, the prices of quality MS rods remained stable over the past one month in the market. Prices of 60-grade rod now range between Tk 52,000-53,000 a tonne.
Non-grade MS rod producers use ship scraps as their prime raw material and they are fully dependent on it.
"Import of scraps and using them for production will not be viable for us," said Mr Bashir.
The market share of non-grade MS rod is around 50 per cent of total rod consumption in the country. Bangladesh's steel market is estimated to be 2.5 million tonnes a year.
Bangladesh has nearly 200 re-rolling mills, which consume ship scraps as their raw material and they are located in Dhaka, Narayanganj and Chittagong.