Prices of different categories of mild steel or MS rod, one of the key construction materials, have decreased over the recent months mainly on the back of lower demand in both public and private sectors, industry insiders said.
Ongoing sluggish trend in public sector infrastructure development in the recent months has exacerbated the situation, they noted.
Retailers said they are also going through a tough time on the back of poor demand whereas their existing stock has lost its value.
Standard quality or 72-grade per tonne MS rod has been selling between Tk75,000 and Tk85,000 at the present time; whereas in the last week of August this year, the prices were hovering between Tk87,000 and Tk92,000.
A trader of old Dhaka, Tanim Rahman, told the FE that since August prices have been gradually decreasing as customers are showing less interest.
"One reason behind the price decrease could be the economic uncertainty created with regime shift, while it had been wet season when construction works usually slow down," he said explaining the reason.
Even when price shows a declining trend, many people wait for further decrease, he added.
According to data available with the state-run Trading Corporation of Bangladesh (TCB), depending on brands and qualities, per tonne rod was selling between Tk84,000 and Tk85,000 on Thursday at different selling points in the capital city.
There was a significant drop in the prices compared last year's December, when rod was selling between Tk92,500 and Tk99,500.
Contacted, Deputy Managing Director of Bangladesh Steel Re-Rolling Mills or BSRM, Tapan Sengupta, said price always depends on manufacturing cost, demand and supply.
"Millers now somehow keep their respective businesses running even incurring loss mainly due to the poor demand," he said, adding that a mill has to maintain a huge operational cost including staff salaries.
Despite losses, mills now offer lower price with the expectation that demand will increase in the coming days, he said.
Responding to a query, he said price of scrap metal, key ingredient of the steel products including rod, has slightly declined in the international market in the recent time.
"Global price change usually takes three months to lay its impact on the local market," he said adding that scrap metal prices were hovering over $360 per tonne in the recent time.
According to data available with the Bangladesh Steel Manufacturers Association (BSMA), the local millers have invested around Tk750 billion while the estimated annual turnover is around Tk700 billion.
Some 40 large-scale companies meet the majority of local demand while around 200 small and medium-scale mills are operating in the country to meet the local demand. Their production capacity is nearly over 10 million tonnes.
The BSMA held a press conference at the end of last month depicting the sorry state of the sector.
BSMA leaders said the sector has been severely affected by the slowdown in government infrastructure development in the country.
Currently, steel is being sold at a price lower than the cost of production to cover overhead costs.
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