Most steel mills in dire straits

Most of the steel mills are in dire straits due to low demand, energy shortage and non-availability of local billets, sources said.
Slow progress of the government's annual development programme (ADP), dull business in the housing sector and weak flow of money are the causes behind the decline in the demand for steel products, they said.
According to them, massive investments have been made by some big industries for manufacturing steel products over the last decade but more than 50 medium and small factories faced closure during this time.
They said due to substantial investment and maintenance of quality with imported billets, the trend in manufacturing rods from direct scrap is witnessing a change.
Currently, against a demand for 2.0 million tonnes of billet, more than 1.2 million tonnes are being imported and only 0.80 million tonnes are manufactured through melting scraps.
As the small and medium factories are facing trouble over bank loan and energy problem, they cannot manufacture steel products from local billets.
The mills which manufacture quality steel products from billets made by melting scraps sourced from ship breaking industries are in trouble and many of these have already been shut down.
A good number of operating mills are not capable of adopting advanced technology, so they are about to stop manufacturing billets with some doing direct re-rolling from scraps.
Speaking on the issue, chairman of BSRM (Bangladesh Steel Re-rolling Mills) Ali Hussein Akberali said, "We import billets as we do not get the raw material locally as per our requirement. Though we manufacture billets in our factory, this is not enough to meet the demand."
He said as the leading steel mills are investing money in manufacturing billets from local scraps, import of billets would stop soon.
The BSRM chairman said, "As the local factories are not capable of meeting the demand for billets, we have to import the item which forces us to increase prices of the quality products."
According to market analysts, the demand for steel products made from local billets is still there for 40 grade rods as these are being used for maximum six-storey buildings and other small and medium construction works.
There is also a demand for steel rods of 60 grade and above mainly in the government's large projects and high-rise buildings, they said.
Meanwhile, ship breaking and recycling industry sources said they are capable of supplying 2.6 million tonnes for iron scraps which is more than the present demand.
As per data available from the industry, cent per cent billets could be made locally by melting the scraps sourced from ship breaking yards.
Former president of Bangladesh Steel Mills Owners Association Mizanur Rahman (Babul) said prices of steel rod are declining as its production is more than the demand.
He said large-scale investments in manufacturing steel products are being made but small and medium mills are facing trouble as they are not getting facilities from the government.
Mr Rahman said if the political situation remains stable, the government speeds up its development projects and the existing problem in the housing sector is removed, the current situation is expected to improve.