The price of mild steel (MS) rods has remained high in Bangladesh for the last several weeks, resulting in high construction prices.
Market insiders said that the price of rods, the main material for construction, has shot up by Tk7,000-Tk8,000 per metric ton in the last few weeks.
According to the Trading Corporation of Bangladesh (TCB), as of March 3, the price of 60-grade MS rods was Tk83,500 per metric ton — a 28.46% year-on-year hike from Tk65,000 per metric ton last year.
The price of 40-grade MS rod has also experienced a record hike.
As of March 3, it was being sold at Tk77,500 per metric ton — a 29.16% year-on-year hike from Tk60,000 per metric ton last year.
Meanwhile, rod traders said the actual price of rods was more than Tk85,000 per metric ton in the local market.
Steel manufacturers blamed this on the price of melting scrap, the main raw material of rods, which has been on the rise in the domestic and international markets for several months.
Moreover, the ship freight fares, price of fuel, and transportation costs have increased in the global market, which led to an increase in transportation costs, said the manufacturers.
Jamal Hossain of M/S Jannat Enterprise of Kallyanpur Notun Bazar told Dhaka Tribune that they are now selling BSRM rods for Tk83,000 per metric ton, and Bandar Steel Industries Ltd rods for Tk77,500.
The scenario is the same on the outskirts of the capital.
Shahab Uddin, owner of Janata Traders of Dhamrai, said that the prices of all building material have gone up, with rod prices increasing by Tk15,000 to Tk20,000 in just a year.
Md Shahidullah, general secretary of Bangladesh Steel Manufacturers Association (BSMA) and managing director of Metrocem Ispat, told Dhaka Tribune that the price of steel is rising in the country’s market due to rising scrap prices globally.
Bangladesh has to depend on imported scrap material and the price of imported melting scrap is currently more than $600 per metric ton, which was about $300 per metric ton last year, he added.
Industry insiders also said that Bangladesh imports scrap from the US, Canada, Australia, Africa, China and some European countries. Construction work has increased in those countries after the return of normalcy from Covid-19, which led to the increased demand for scrap.
Tapan Sengupta, deputy manager of BSRM, said that it is impossible for them to reduce the price of rod without the prices of raw materials dropping in the international market.
He also said that the price of scrap metal in the global market has almost doubled in a few months.
“Even then, the manufacturers did not increase the price of rods, 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,” he further said.
However, the rising cost of rods is having a direct impact on real estate, private homes and other construction sectors by driving up building costs.
According to market insiders, construction costs have increased by around 25-26% due to the hike of rod prices, though it is less for residential construction.
They also said that this is the first time that the price of rods has gone up this high — above Tk83,000 per metric ton — in the country.
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 many times 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.
The real estate businesses also asked to formulate a regulatory body under the supervision of the Commerce Ministry to fix the rod prices in the country’s market as the rod manufacturers increase and decrease the prices at their will.
