Sudden fall in prices of raw materials puts steel, re-rolling millers in trouble
Sunday, 28 September 2008
The country's steel and re-rolling millers were passing through a bad time, as the prices of raw materials of their products had marked a sharp fall in the last couple of months, reports UNB.
According to industry sources, the prices of raw materials of steel and re-rolling products, particularly that of melting and re-rollable scraps, had come down to US$450 from $640 per tonne in the last two months.
As a result, the millers who had finalised formalities to import the raw materials two months back were now receiving those and counting a loss of about $200 per ton.
Even though the sudden fall in the raw material prices had put the steel and re-rolling millers into trouble, it had little impact on the local retail market of MS rods.
"Due to the effect of the price fall on the international market, we've to sell our products at lower prices suffering a loss of about Tk 14,000 per ton, but there is no impact of it on the retail market," said a re-rolling mill owner.
He said the retailers were still selling the MS rod almost at the same high prices as they had done two months back.
According to the sources, the 40-grade MS rod was selling at between Tk 55,000 and Tk 60,000 per ton, while the 60-grade MS rod at Tk 70,000 per ton. The price of 60-grade rod remained unchanged.
Similarly, the effect of price fall of the MS rod was also not visible in the real-estate sector.
MS rod manufacturers alleged that the developers had raised the prices of apartments showing the excuse of rise in steel products.
"But these developers who directly collect MS rods from steel mills at lower prices have not yet reduced the prices of apartments. So, the customers are not getting the benefit of price fall," said a MS rod manufacturer.
Allegations were also there that a section of developers and contractors involved in public works through tenders was asking the manufacturers to produce lower sized rods than the standard ones.
They asked the manufacturers to make 10-millimetre (mm) rod 9-mm one and the 16-mm rod 15-mm one.
"This is simply cheating… with this practice, both the developers and contractors are making undue profits, while the government and apartment buyers are counting losses and receiving substandard products," said another miller.
According to industry sources, the prices of raw materials of steel and re-rolling products, particularly that of melting and re-rollable scraps, had come down to US$450 from $640 per tonne in the last two months.
As a result, the millers who had finalised formalities to import the raw materials two months back were now receiving those and counting a loss of about $200 per ton.
Even though the sudden fall in the raw material prices had put the steel and re-rolling millers into trouble, it had little impact on the local retail market of MS rods.
"Due to the effect of the price fall on the international market, we've to sell our products at lower prices suffering a loss of about Tk 14,000 per ton, but there is no impact of it on the retail market," said a re-rolling mill owner.
He said the retailers were still selling the MS rod almost at the same high prices as they had done two months back.
According to the sources, the 40-grade MS rod was selling at between Tk 55,000 and Tk 60,000 per ton, while the 60-grade MS rod at Tk 70,000 per ton. The price of 60-grade rod remained unchanged.
Similarly, the effect of price fall of the MS rod was also not visible in the real-estate sector.
MS rod manufacturers alleged that the developers had raised the prices of apartments showing the excuse of rise in steel products.
"But these developers who directly collect MS rods from steel mills at lower prices have not yet reduced the prices of apartments. So, the customers are not getting the benefit of price fall," said a MS rod manufacturer.
Allegations were also there that a section of developers and contractors involved in public works through tenders was asking the manufacturers to produce lower sized rods than the standard ones.
They asked the manufacturers to make 10-millimetre (mm) rod 9-mm one and the 16-mm rod 15-mm one.
"This is simply cheating… with this practice, both the developers and contractors are making undue profits, while the government and apartment buyers are counting losses and receiving substandard products," said another miller.