Building material prices fall as demand sags

Prices of some key construction materials have sagged slightly in recent times mainly due to poor demand amid economic uncertainties, compounded by monsoon floods, following the downfall of the Hasina-led government.
Insiders say the situation sees no sign of improving soon as major consumers of the materials like the real-estate sector, which have already undergone internal and external shocks, are treading a tightrope.
Per tonne 72-grade mild steel (MS) rod retailed at Tk 87,000-92,000 last week. It was priced between Tk 90,000 and Tk 95,000 in March.
"Some leading brands aside, most millers have recently lowered the rate," said Shamim Rahman, a retailer in old Dhaka's English Road, adding that he could sell only 0.3-tonne rod last Wednesday, which was one fourth of regular sales.
Millers have been treading cautiously due to a poor demand.
"The demand for rod and cement usually sags in rainy season. Moreover, the recent action-packed regime changeover also plays a part," said Mr Shamim.
When contacted, Bangladesh Steel Manufacturers Association (BSMA) former president Sheikh Masadul Alam (Masud) said the price drop was merely a strategic move of millers to sustain their investment and employment.
"We're now walking a tightrope as the demand declined since development projects have virtually come to a halt following the downfall of the government," he added.
Ongoing floods have also posed a threat to the revival of the demand, said Mr Alam, adding that the price of scrap metal, a key ingredient of the industry, has remained stable in recent times.
"Scrap was selling at $430 per tonne," cited Mr Masud who is also managing director of Shahriar Steel Mills Ltd.
Unlike MS rod, cement price has remained almost unchanged during the March-August period, said Abdul Quader who deals in several cement brands.
He said 50-kg cement per bag sold at Tk 500 and 560. Of the brands, Shah Cement retailed at Tk 530, Premier at Tk 510 and Scan at Tk 560.
"Prices of some brands fluctuated by Tk 10 periodically, otherwise the market remained stable. But sales are now almost one third of the usual level."
The price of clay brick has also declined slightly as per thousand bricks sold between Tk 12,000 and 15,000, according to sources.
In response, the price of concrete block declined by almost 20 per cent to cope with the challenging situation, said Bangladesh Concrete Block & Paver Manufacturers Society president Lt Col (retd) Shakhawat Hossain.
"An alternative to traditional brick, concrete block apiece now sells at Tk 9.0 from Tk 11 earlier," said Mr Hossain.
There are different types of blocks in the market.
Many Awami League-backed contractors have now gone into hiding. Again, the release of funds for projects also remains halted, said Mr Hossain as he explained a shaky ambience for the construction sector.
On the other hand, according to a top official of a paint-making company, the sales of paint and coatings have slumped to a mere 20 per cent.
"The companies that sold their products to dealers on credit are now in a tight corner," he said, adding that some are now on the verge of closure.
Mahbub Hossain, a building contractor, has not implemented any project in the past three months.
"Most of the building projects have remained halted and new projects are not being launched due to recent changes in the political domain," he told the FE.
"Therefore, we cannot reap the benefits of any price decline or price stability."

[email protected]