Import of iron scraps, old ships made open
Jasim Uddin Haroon | Tuesday, 3 June 2008
The government Monday opened up import of iron scraps and old ships for all through an amendment made to the existing import policy in an effort to reinvigorate the construction sector.
The Ministry of Commerce issued a circular relating to the amendment in the import policy with immediate effect. Earlier, under the import policy the import of iron and steel scraps was allowed only by owners of steel plants.
The move came against the backdrop of a rising prices of mild steel (MS ) rod in the local market.
Only members of Bangladesh Ship Breakers Association (BSBA) could import old vessels for scrap iron.
The ministry, however, expressed the hope that the new circular will help keep prices of MS rod at a tolerable level.
Local steel producers use imported iron scraps and scraps collected from old ships as raw materials for manufacturing rod.
The ministry said there will be no reservation on import of iron scrap and old ships with the issuance of the circular.
While talking to the FE, BSBA adviser Zafar Ahmed said the government move will have a negative impact on the import of old vessels as it will create 'unhealthy competition' in the sector.
He said: "A rush of buyers will fuel prices of old ships in the international market."
Mohammed Mohsin, managing director of Rahim Steel, a leading steel manufacturer, told the FE that the opening up of import might not ease prices of rod in the market as there is a shortage of scraps in the international market.
"There is shortage of scraps in the international market. So, the new importers, who do not have steel plants, will create problem for the sector," Mohsin added.
Sheikh Masudul Alam Masud, general secretary of Bangladesh Steel Re-rolling Mills Association (BSRMA), said the government move for open import of old vessels might have a positive impact on the rod market.
"We welcome the move. But the prices of scraps have been maintaining at higher level in the international markets. So, it will take time to stabilise the prices in the domestic rod market," Masud added.
The government issued the new circular following recommendations made by a committee that investigated the unusual price hike of rod in the market.
The government April 22 ordered probe into the abnormal rise of prices of mild steel (MS) rod in the country amid allegation that some manufacturers are cashing in on lax government monitoring of the market.
On Monday, the prices of finer quality rod ranged between Tk 70,000 and Tk 72,000 a tonne, up from around Tk 40,000 in January, while the prices of low grade rod sold between Tk 64000 and Tk 65,000 each tonne, up from Tk 35,000 in January.
Currently, around 250 re-rolling mills, located in Narayanganj, Dhaka and Chittagong, produce MS rod in the country.
The Ministry of Commerce issued a circular relating to the amendment in the import policy with immediate effect. Earlier, under the import policy the import of iron and steel scraps was allowed only by owners of steel plants.
The move came against the backdrop of a rising prices of mild steel (MS ) rod in the local market.
Only members of Bangladesh Ship Breakers Association (BSBA) could import old vessels for scrap iron.
The ministry, however, expressed the hope that the new circular will help keep prices of MS rod at a tolerable level.
Local steel producers use imported iron scraps and scraps collected from old ships as raw materials for manufacturing rod.
The ministry said there will be no reservation on import of iron scrap and old ships with the issuance of the circular.
While talking to the FE, BSBA adviser Zafar Ahmed said the government move will have a negative impact on the import of old vessels as it will create 'unhealthy competition' in the sector.
He said: "A rush of buyers will fuel prices of old ships in the international market."
Mohammed Mohsin, managing director of Rahim Steel, a leading steel manufacturer, told the FE that the opening up of import might not ease prices of rod in the market as there is a shortage of scraps in the international market.
"There is shortage of scraps in the international market. So, the new importers, who do not have steel plants, will create problem for the sector," Mohsin added.
Sheikh Masudul Alam Masud, general secretary of Bangladesh Steel Re-rolling Mills Association (BSRMA), said the government move for open import of old vessels might have a positive impact on the rod market.
"We welcome the move. But the prices of scraps have been maintaining at higher level in the international markets. So, it will take time to stabilise the prices in the domestic rod market," Masud added.
The government issued the new circular following recommendations made by a committee that investigated the unusual price hike of rod in the market.
The government April 22 ordered probe into the abnormal rise of prices of mild steel (MS) rod in the country amid allegation that some manufacturers are cashing in on lax government monitoring of the market.
On Monday, the prices of finer quality rod ranged between Tk 70,000 and Tk 72,000 a tonne, up from around Tk 40,000 in January, while the prices of low grade rod sold between Tk 64000 and Tk 65,000 each tonne, up from Tk 35,000 in January.
Currently, around 250 re-rolling mills, located in Narayanganj, Dhaka and Chittagong, produce MS rod in the country.