Local consumers are still paying high prices for CI and plain sheets despite a substantial fall in prices of raw materials in the international market, market insiders said.
They said the import costs of the key raw materials mainly -- HR (Hot roll) Coil and Zinc -- have almost halved within the last couple of years but the local manufacturers are yet to cut their selling prices in line with the international price fall.
Both dealers and retailers said prices of CI (corrugated Iron) sheet and plain sheet remain almost unchanged in the domestic market although their cost of production came down significantly following the fall in the prices of basic raw materials.
According to them, prices of a tonne of CR coil and zinc were US$1,280 and $2,700 respectively in 2011 which gradually came down to $ 550 and $ 2,200 respectively in October last.
Dealers and retailers said the producers reduced only Tk 200 to Tk 350 on a bundle of CI sheets and Tk 30 to Tk 35 on each plain sheet (70'x72') in the last two/three years which they termed much lower than the expectation.
After a visit to the city's different wholesale markets including English road and Mirpur, FE found that a bundle of 46 mm CI sheets was being sold at Tk 6,700 to Tk 7,100 and a piece of plain sheet (34mm) at Tk 500 to Tk 600 depending on their brand and quality.
Traders said the producing companies neither reduced the prices of the item nor increased dealers/retailers' commission which means all the profits are going to the companies' account alone.
"Lower income group people are the main consumers of CI sheets and plain sheets, but irony fate is that in absence of any government monitoring/control, some six companies are doing what ever they want," Hazi Abdul Hamid, proprietor of Munna Iron House at English road told the FE.
"If the government would set a criterion of profit- taking for the companies, then lower income group people would be the ultimate beneficiaries of the price fall of raw materials in the international market," he added.
Aminur Rahman, another trader in the Mirpur area said after official closure of the state-owned Karnaphuly Steel Mills, a group of big capital based companies squeezed out the smaller ones from the market and since then they have been doing a syndicated business and were making hefty profit.
"Price fall of raw materials in the international market has come as a blessing only for the manufacturers, not the consumers," he added.
"If the companies would feel minimum commitment toward the consumers, then they would reduce prices of their produces by at least 25 per cent."
"Whenever prices of raw materials go up, these companies without any prior announcement increase prices of both CI sheets and plain sheets-it is a common practice by them. But they remain silent whenever their production cost falls," Mr Rahman expressing his anger said.
However, echoing the claim of price fall of raw materials, high officials at the leading steel mills said that they did not adjust inflationary effect on their goods which can be treated as price reduction.
"In one sense it is true that we did not reduce prices of our produces in line with the price fall of raw materials. But at the same time we did not even increase our prices what we do every year to adjust the inflationary effect and other increased administrative costs. It is you who can treat it as reduction,' an official of Appollo Ispat Complex Limited (AICL) told the FE preferring anonymity.
"Considering the financial condition of the consumers, mill-owners were doing their business with a marginal profit. Present situation might have given the millers a relief. But you cannot term it as doing hefty profit," a deputy general manager of PHP Steels Ltd said on condition of not to be named.
However, according to the market insiders, some six companies including PHP Steels Ltd, Appollo Ispat Complex Limited, S. Alam Steel and AKH Ishpat meet almost 95 per cent of the local demand of around 0.2 million tonnes of CI and plain sheets annually.
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Flat steel makers leech consumers despite lower production costs
Badrul Ahsan | Published: November 29, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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