The price of rods, the main input material in construction, has gone up by around 20 percent in a year in the local market, raising costs in the construction and real estate industry.
Rods or rebar is the steel bar or mesh of steel wires used as a tension device in reinforced concrete and reinforced masonry structures to strengthen construction and keep them standing.
Rebar millers said the price has gone up for various costs, including import costs, such as the price of inputs of their own, the strong US dollar, higher transport costs and congestion at the ports.
According to the Trading Corporation of Bangladesh (TCB), the price of 60-grade rod increased by around 18 percent, while the price of 40-grade increased by around 17 percent compared to the last year’s.
“60-grade MS rod/rebar, or better quality, is being sold from Tk 62,000 to Tk 65,000 per ton which was Tk 53,500 to Tk 54,500 in December, 2017. On the other hand, 40-grade MS rod is being sold at Tk 56,500 to Tk 58,000 per ton, which was earlier on sale for Tk 48,500-Tk 49,500 per ton during the same period,” the TCB also mentioned.
Meanwhile, traders in Old Dhaka, the hub of the country’s market for rods, say their business is on the wane. Their sales are suffering and even loading and unloading of their goods in the narrow and unfriendly lanes is getting difficult, and most of them are counting losses.
“I’ve been doing business here since 30 years. We’re selling Bangladesh Steel Re-Rolling Mills (BSRM) products as it enjoys popularity. However, business has now nosedived due to the absence of a business-friendly environment and too many traders in relation to customers,” Sonjoy Chowdhury, proprietor of Metro Traders in Old Dhaka, told UNB.
“Now we’re selling BSRM rod at Tk 66,000 per ton that has somewhat increased compared to the last year. However, once a total of 18 shops were in Old Dhaka those who sell rebar. Now more than 300 shops have sprung up here. Besides, there is no space to build any more here. Some people are setting up in rural areas though many shops are there. Even manufacturers have appointed dealers in villages. So, village people don’t purchase rod from this market over transport cost,” he also said.
BSRM, Rahim Steel, Bandar Steel Industry Ltd, and Abul Khair Steel Mills Ltd, the main players in the country’s thriving steel industry, are playing a major role in the price of rods.
Without providing their source, they also added that BSRM has “30 percent of the country’s rod market”. About 20 percent market share is apparently held by Rahim Steel, Bandor Steel, and Abul Khair Steel Ltd, they say.
A few other companies like Kabir Steel Re-Rolling Mills (KSRM), Ratanpur Rerolling Mills (RSRM), Anwar Ispat Ltd, Shafiul Alam steel, and Shahriar Steel Mills hold the remaining 50 percent market share.
Traders of Narayanganj, another hub of the rod trade in the country, say the price is high there too but business is not down. Each ton of non-grade rod was selling at Tk 52,000 to Tk 58,000 while the quality grade at Tk 60,000 to Tk 68,00 per ton.
Shamshul Alom, proprietor of M/s KRI Steel Traders in Narayanganj, said the business is “neither very good nor very bad”. They are selling different grades of rebar at prices ranging from Tk 52,000 to Tk 64,000 per ton.
“Our business is somewhat on the wane following various reasons. Many politicians have stopped construction as the election is knocking on the door. They don’t want to disburse cash. However, different costs, including VAT, raw materials and other costs, are the causes behind the price hike,” he added.
S.K Masadul Alam Masud, former chairman of Bangladesh Auto Re-rolling and Steel Mills Association (BARSMA) and Managing Director of Shahriar Steel Mills Ltd said: “We’ve to import all raw materials for making rods so the price depends on a lot of factors in the international market. So, the prices depend on a number of factors in the overall global scenario beyond our control.”
Most notably, US President Donald Trump’s move to initiate a ‘trade war’ against China has been the most significant shock to the global steel industry and others associated with it, such as retailers, in years.
“Last year, scrap price was $300 but now it has gone up to $380 to $400 per ton. Besides, dollar rate was around Tk80, now it went up to around Tk84. And other costs also increased and that’s why the price increased compared to the last year. The price may further increase after the election,” he mentioned.
Liakat Ali Bhuiyan, Vice-President of Real Estate and Housing Association of Bangladesh (REHAB), said the price of their industry’s main input materiel has ‘somewhat increased’ compared to the last year.
Sources in the real estate industry say many firms have put a halt to their work due to the high price of their main input. However, they admit some works are actually halted due to the upcoming election.unb