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Construction set to be costlier as rod prices soar
FROM PAGE B1
“The implementation of the annual development programme will be affected significantly. Local construction companies will fall in trouble as procurement entities don’t adjust prices for the projects with tenure less than 18 months,” he said.
Similarly, procurement entities don’t keep the provision of revising the budget of projects whose implementation tenure is more than 18 months, although the latest public procurement rules support it. The condition of price adjustment is, however, kept in case of the involvement of foreign companies, the entrepreneur said.
Until October, millers ran mills at half of their production capacity because of lower demand and lower prices owing to the fallouts of the pandemic. Manufacturers are now facing a shortage of raw materials, although the peak season started in November.
As much as 90 per cent of the raw materials are imported from the US, Canada, Italy, the UK and Australia, which are yet to see a pickup in economic activities.
“In the last six months, the steel makers’ losses amounted to around Tk 6,000 crore,” said Hossain.
An unhealthy competition also prevailed in the domestic market as everybody wanted to make cash through the selling of stocks of finished products, he noted.
Md Shahidullah, secretary-general of the Bangladesh Steel Manufacturers Association and managing director of Metrocem Steel, said they are now importing scrap for around Tk 40,000 per tonne. It was Tk 32,000 just two months ago.
Manufacturers need to spend Tk 20,000 per tonne on average to produce finished products, taking the production cost to Tk 60,000.
“So, the price rose,” he said.
The steel industry in Bangladesh is worth Tk 55,000 crore.
There are about 40 active manufacturers with a combined capacity to produce nine million tonnes of steel a year. Of them, Abul Khair Steel, GPH Steel, BSRM and KSRM meet more than half of the annual demand of eight million tonnes.
Tapan Sengupta, deputy managing director of BSRM, said the price would increase further as the price of steel scrap is on the rise.
According to him, scrap is selling at $480 per tonne now, but it was $270 in April.
“The price of steel scrap rose as China is importing steel whereas the country had exported finished products before the pandemic. If China imports the scrap, nobody can say how much the price will increase,” he said.
He said manufacturers had to adjust the cost, causing the price to go up. However, the price is still at a tolerable level in Bangladesh compared to other countries.
The government’s infrastructure projects account for 35-40 per cent of the total steel consumption in Bangladesh, up from 15 per cent a decade ago.
Kamal Mahmud, vice-president of the Real Estate & Housing Association of Bangladesh and managing director of Skiros Builders, said the hike in steel price would increase the cost of projects by 15 per cent.
“This will affect the construction industry. The sudden increase of rod price will affect not only the infrastructure and construction sectors, but also the development work in the country.”
He alleged that steel and cement makers hike the price during the peak season every year.
“We have to buy rods despite the price increase.”

Major commodity processors more into crushing oilseeds
FROM PAGE B1
In the past 10 months to October this year, oilseed imports soared 36 per cent year-on-year to 26.81 lakh tonnes, shows data from the Bangladesh Bureau of Statistics.
Biswajit Saha, director, corporate and regulatory affairs of City Group, said the increase in imports was a result of the expansion of crushing abilities to derive soybean and sunflower oils apart from supplying soybean meals.
“Consumption of soybean oil has increased,” he said, adding that soybean oil accounts for a third of the annual consumption of edible oil in the country.
“The market for soybean meal is also growing gradually,” he said, adding that the daily demand for the feed ingredient was 13,000 tonnes.
Saha also said that local mills now face increased competition from imported soybean meals as no duty was levied. He demanded it be imposed to protect local seed crushing mills.
Md Ahsanuzzaman, general secretary of the Feed Industries Association of Bangladesh, said the entry of more players should increase competition in the soybean meal market, which stands at around 15-20 lakh tonnes annually.
At the same, the import benefit for both soybean and its associated meals should continue to ensure that feed makers get their ingredients at a competitive rate, he said.