The price of steel continues to rise in Bangladesh due to the rise in prices of imported raw materials in the international market.
Entrepreneurs in real estate said that the rising cost of steel is having a direct impact on their business, driving up building costs.
Md Shahidullah, general secretary of Bangladesh Steel Manufacturers Association (BSMA) and also managing director of Metrocem Ispat, said that the price of steel is rising in the country’s market due to the impact of the rising price of scraps globally.
The price of imported melting scrap, the main raw material for steel, is currently worth about $550-$590 per ton, which was $490-$500 per ton even a few months ago and $300-$350 per ton in October last year.
Moreover, the price of iron extracted from shipbreaking has also surged, further raising the price of steel, industry insiders added.
They also said that about 70% of the raw material has to be imported. And due to the rise of the price of the raw materials in the international market, the price of steel has increased by about Tk20,000-25,000 per ton since last year.
Real estate sector insiders said that the hike in the price of MS steel will raise the construction cost of apartments and homes by around 10-15%.
Moreover, it will also impact the construction costs of many mega or mini projects including bridges, culverts, and flyovers, they also said.
Lion Sharif Ali Khan, vice-president of Real Estate and Housing Association of Bangladesh (REHAB), told Dhaka Tribune that the repeated rise in steel prices is having an impact on the construction of apartment buildings.
“All the steel and re-rolling mills in the country have increased the prices together and we and our customers are suffering. Steel prices are rising every month, so we do not understand exactly how much price we should fix per square foot of area,” he added.
He also said that clients had bought flats by paying in advance for the per square foot prices, but the price of steel has increased manifolds since then, driving up construction prices.
“We cannot even cover our production costs because we cannot take money again from our customers. Moreover, the new customers have to pay more than the previous ones for the same flat,” he added.
At various markets in the capital, 60-grade MS steel rod was being sold at Tk73,000-Tk75,000 per ton and 40-grade MS steel rod was being sold at Tk58,000-Tk60,000 per ton.
Dealers and sellers worry that prices may shoot up further and the per ton price of 60-grade MS steel may reach the Tk80,000-mark.
According to market insiders, the price of steel has shot up by 38% in the country in the last one year and they are worried that the production cost of public infrastructure projects and private residential buildings may push prices even higher.
Steel entrepreneurs said that the price of scrap metals has increased significantly in the international market due to limited supply stemming from a decline in production in Japan and Europe amid the pandemic.
But at the same time, the demand for scrap, and later steel, went up as most economies have returned to normal following mass vaccination campaigns.