Prices of steel rods have increased slightly over the past three months due to a growing demand and a hike in raw material cost on the international market, say stakeholders.
Despite this, millers are maintaining cautious strategies, lowering production below capacity to sustain their business while sacrificing their profit margin. They expect the market to become vibrant again in the coming days.
Retailer data show that per tonne rod is now selling between Tk 83,000 and Tk 89,000 depending on the brands. Prices have fluctuated significantly in the last one year.
In March last year, one tonne rod cost between Tk 94,000 and 95,000. Since then it has undergone changes several times. In December last year, the price dropped significantly to between Tk 80,000 and Tk 84,000.
A dealer of several brands, Mahfuz Noman told the FE that the private-sector and small-scale construction projects in rural areas are keeping the market alive, as public-sector construction work is progressing slowly.
"In recent times, demand has been satisfactory thanks to the dry season," he said, adding that November to March is considered suitable for construction due to minimal rainfall.
Demand has risen by around 20 per cent in the last four months comparing to that of the previous several months, he said. "Overall prices are stable now if you consider that the rates exceeded Tk 100,000 per tonne in 2023," he said.
When contacted, Managing Director of SSRM Sheikh Masadul Alam (Masud) said public sector development projects are now going at a snail's pace than usual, causing a setback for the millers, especially for those who have increased their investment in the recent years.
"The current government has not adopted new development projects," he said, adding that a favourable political situation might help the sector to revive in days to come. He said on an average a steel mill runs at 50 percent of its capacity. "It even dropped to 40 per cent earlier," he said, indicating a sign of improvement in the recent months.
He also pointed out that the price of scrap metal, the key material in steel production, has recently increased in the international market by around US $20, reaching around $390 to $400 per tonne.
According to the Bangladesh Steel Manufacturers Association (BSMA) data, the steel industry's overall production capacity is around 11 million tonne. There are around 120 steelmakers in Bangladesh, with some 40 large companies dominating the market.
Per capita steel consumption in Bangladesh is estimated at around 45 kilogrammes annually, which is significantly lower than the global average of 208 kilogrammes.
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