The price of mild steel (MS) rods has reached the highest ever in the history of the country, riding on an uncontrolled surge for the last several weeks. The price never surpassed the point of Tk80,000 per ton before.
Market insiders said that the price of rods, the main material of construction, has shot up by Tk7,000-Tk8,000 per ton.
Tapan Sengupta of BSRM said that it is impossible for them to reduce the prices of rods without the prices of raw materials going down in the international market.
The deputy manager of the largest steel manufacturer in the country also said that the price of metal scrap in the global market has almost doubled in the last year.
Even then, the manufacturers did not increase the price of rods according to the cost of production, considering the affordability of the buyers and ongoing mega projects, he added.
He also said that they have now increased the price of rods in line with the prices of raw materials in the international market. “If the prices fall in the international market, the same will happen here.”
The rising cost of steel is having a direct impact on real estate, private homes and other construction sectors by driving up building costs.
They also said that this is the first time that the price of rods has gone up this high in the country's market.
According to the Trading Corporation of Bangladesh (TCB) data, as of November 15, the price of 60 grade MS rods was Tk81,100 per ton, 8.07% higher than the price of last week, which was Tk75,000.
Meanwhile, the price of 60 grade MS rods experienced a 33.92% year-on-year hike, from Tk54,000 per ton last year.
The price of 40 grade MS rods also experienced a record hike.
As of November 15, it was being sold at Tk77,500 per ton, 9.61% higher than the last week’s price of Tk74,500 per ton, showed the TCB data.
The price of 40 grade MS rods experienced a 40.64% year-on-year hike, from Tk51,000 per ton last year.
Meanwhile, the local rod traders said the actual price of rods was Tk83,000 per ton in the local market.
Steel manufacturers said that the prices of the main raw material of rods, melting scrap, has been on the rise in the domestic and international market for several months.
Moreover, the ship freight fares, price of fuels have increased in the global market, which led to an increase in transportation costs, said the manufacturers.
Md Shahidullah, general secretary of Bangladesh Steel Manufacturers Association (BSMA) and also managing director of Metrocem Ispat, told Dhaka Tribune 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 is currently around $600 per ton, which was about $300 per ton in October last year, he added.
Industry insiders said that Bangladesh imports scrap from the USA, Canada, Australia, Africa, China and some European countries. The construction work has increased in those countries after the return of normalcy from Covid-19, which led to the increased demand for scrap.
Rod sellers said that the steel millers told them the price went up because of the global raw material crisis and the hike in demands.
Although the government data showed that the price has gone by around Tk4,000-Tk5,000, it has actually increased by Tk8,000-Tk9,000 per ton in the last 15 days, they added.
Real estate sector insiders said that the hike in the price of MS rods increased the construction costs of apartments and homes by around 15%-20%.
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 the 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 people bought flats by paying in advance for the per square foot prices before construction, but the price of steel has increased manifolds since then, driving up construction prices.
“We cannot even cover our production costs as we do not have the opportunity to refix the price by adjusting increased production costs. Moreover, the new customers have to pay more than the previous ones for the same flat,” he added.
The prices of billets, plates, and scraps have also shot up abnormally along with the rods, said the insiders.
At present, per ton of scrap is being sold at Tk55,000, plate at Tk60,000 and billet at Tk66,000. Two weeks ago, scrap was sold at Tk50,000, plate at Tk56,000 and billet at Tk60,000-Tk61,000.
Manufacturers fear that the price of rods may rise further due to the new fuel prices as the cost of transportation and production has increased locally.
Pimple Barua from Chittagong contributed to this report.