Costlier raw materials push rod prices to record high  

Highlights

• Price of premium grade rods at Tk72,000 per tonne
• The rate was Tk52,000 per tonne six months ago
• Rod-makers say they are paying more for raw materials
• Price of steel scrap doubled to $550-580 per tonne in eight months
• A surge in construction in Nov last year put rod market on a rising trend

With rod-making raw material scrap prices having doubled since September last year, mild-steel (MS) rod prices climbed to a record high of Tk72,000 per tonne.

The rate of the premium quality (75-grade) rod was at Tk52,000 per tonne just six months ago.

Explaining the rise, rod manufacturers have said prices of rod-making scrap in both international and national markets have been rising since September last year, making all grades of MS rods pricier. The scrap is either directly imported in billet form or supplied by Chattogram-based shipbreakers.

Tapan Sengupta, deputy managing director of the BSRM Group, said scrap was at $265-270 per tonne in July-September last year in the international market, while the current rate is at $550-580.   

"Though scrap rates almost doubled in the last eight months, we did not double rod prices considering the ongoing mega-projects of the government and the general people. We are still selling rods at adjusted rates with production costs," he commented.   

MS rod wholesalers said there are four types of rods available in the market – premium (75-grade) quality, fine quality (60-grade), good quality (40-grade) and general quality.    

With the Tk20,000 per tonne hike, fine quality rod is now selling at Tk65,000, good quality sells at Tk63,500 and general category is at Tk60,500 per tonne. Amid the rising trend, each of the categories has edged up unusually by Tk2,000 per tonne in the last two days alone.  

People in the steel sector said the country's construction sector faced a stalemate with the Bangladesh government imposing a 66-day countrywide shutdown to curb coronavirus infection. After a pause for five or six months, the construction sector started recovering from November last year as demand for rods kept rising.  

With the burgeoning demand, rod prices started edging up from mid-November, said Chattogram rod wholesaler SM Arifuzzaman.   

"Since then, prices of the construction material have been hiked multiple times," he noted.

Bangladesh is completely import-dependent for its steel industry. The country either imports billet, which is rod-making flat forged steel, or scrap ships to meet domestic demand. The pandemic-led crisis has badly affected both options vis-a-vis rod-makers' raw material collection.  

Mohammad Sarwar Alam, director of Golden Ispat Ltd, said, "In February-March this year, the booking price of scrap in the international market was only $460-470 per tonne, which is now $545-550. Similarly, the price of scrap in the domestic market was Tk30,000-35,000 per tonne in November last year; it is now at Tk50,000-52,000 per tonne."

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