Rod price jumps Tk5,000 per tonne as scrap supply from Ukraine halts

The price of rod jumped by Tk5,000 per tonne in the last two weeks after scrap supply from Ukraine had stopped in the wake of the Russian invasion.

But traders said there was no reason for increasing the rod price right now as the raw materials used for the products currently available in the market had been imported before the crisis began.

Steel rod producers, however, said the crisis in Ukraine, one of Bangladesh's major scrap metal sources, has caused a hike in the booking price of the raw material – which subsequently raised the rod price.

Mohammad Jasim Uddin, senior general manager (sales and marketing) at KSRM, said, "Bangladesh imports a lot of scrap metal from Ukraine. Due to the war there, scrap exports from the country have come to a complete halt. The crisis in the international market has led to a hike in the booking price of raw material used in making rod."

Besides, the cost of importing raw materials has been increasing due to the hike in ship fare. As a result, the price of rod in the domestic market has recently increased more than once.

The prices of Grade 75 rod produced by BSRM jumped from Tk79,000 to Tk84,000 per tonne, KSRM from Tk78,000 to Tk83,000, AKS and GPH from Tk77,000 to Tk82,000, and Golden, SASM, Sitalpur, HM and Bayezid Steel from Tk76,000 to Tk81,000 in the last two weeks.

The price of Grade 60 rod made in semi-automatic mills have increased from around Tk69,000 per tonne to around Tk74,000. Currently, Al-Safa Steel Re-Rolling Mills Ltd, Ambia Re-rolling Mills, Peninsula Steel Mills, among others, sell rods of this grade.

Besides, the price of standard Grade 40 rod has increased from Tk67,000 per tonne to Tk72,000 in the last two weeks.

Meanwhile, the prices of billets, steel sheets and scraps used for making rod have also gone up sharply.

Currently, a tonne of scrap is being sold at Tk60,000, steel sheets at Tk64,000 and billet at Tk70,000, while two weeks ago, scrap was sold for Tk56,000, plates for Tk61,000 and billets for Tk67,000.

Sarwar Alam, director of Golden Ispat, said one month ago, the booking price of scrap metal in the international market was below $600 (Tk51,733) per tonne, which has increased to $620-630 (Tk53,500-54,320) now.

At present, scrap is not available in the international market even at higher prices. This has affected the product's price in the domestic market, he added.

Traders in the steel sector said the price of rod has been rising in the country for more than a year now. During this period, the product's price in the domestic market has increased by around Tk30,000 per tonne.

Traders complained that the price of rod in the domestic market has increased at a much higher rate compared to the raw material price hike in the international market.

SM Arifuzzaman, proprietor of Zaman Enterprise in Chattogram, said, "The raw materials bought at higher prices from the international market have not yet reached the factories yet. The raw material currently used for making rods at the factories were bought earlier. So, it is completely unreasonable to increase the price of rod now."