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Rod prices continue to ride high as the cost of raw materials keeps rising in the international market, dashing the dream of realtors to get over the pandemic shock.
Local prices of the key construction material hovered around Tk 80,000 per tonne on Saturday, a 7 per cent rise over the last week.
Steel mill owners said the price soared 45 per cent from that in the previous year spurred by spiraling cost of scraps in the overseas market.
“We are in trouble,” Tanvirul Haque Probal, a former president of Real Estate and Housing Association of Bangladesh (REHAB), told The Business Post.
“The stagnant construction sector will now go back to a terrible state. It is necessary to take initiatives to control steel price,” he added.
According to Sk Masadul Alam Masud, a former president of Bangladesh Steel Manufacturers Association, the rising cost of steel in global market has pushed up rod prices in local market.
“The devaluation of local currency against the greenback is mainly the reason for the rise in road prices. In addition, the rising fuel price has also pushed the transportation cost, leaving an adverse impact on the overall rod price,” added Masud.
“The price of iron extracted from shipbreaking has also surged, further raising the price of steel. As a result, all the countrywide construction projects and the real estate industry are feeling the pinch of the rod price hike.”
Rod supplier Mintu Mia, proprietor of Janata Trading at Tejgoan, said the prices of rods of all brands increased every day throughout last week.
The rods of different brands were being sold at between Tk 75 to Tk 80 per kg which was Tk 65 and Tk 75 a kg a week earlier.
There are around 100 rod manufacturers in the country.
Of them, Bangladesh Steel Re-rolling Mills, Bandar Steel Industries Ltd, Abul Khair Steel, Rahim Steel Mills, Kabir Steel Re-Rolling Mills, Ratanpur Rerolling Mills, Anwar Ispat Ltd and Baizid Steel are major players meeting 60 per cent local demand.
Besides, a few other companies like GPH Ispat, Kamal Steel and Re-Rolling Mills, Rani Re-rolling Mills Ltd, HKG Steel Mills Ltd, SAS Group, Vikrampur Steel Ltd and Shahriar Steel Mills Ltd meet the rest of domestic demand.
Ferrous scrap prices in global markets had been going through ups and downs because the demand was high. In the recent days, scrap price in Bangladesh is the highest among the Asian Steel Scrap Market.
Here it is priced at $ 570 per tonne while the price in the global market is hovering around $ 450 to $ 550.
As this is the peak season for construction business, mills are facing a serious crisis of scraps though they are paying high prices for the raw material.
Entrepreneurs in the real estate sector said the rising cost of steel is having a direct impact on their business, driving up building costs.
According to the estimate, a 6-kilogramme rod is required for construction of a square-foot building.
The price of rod has increased by Tk 25 per kg in comparison with that last year.
Besides, other metal components used in construction have also witnessed a price hike by Tk 250 per square foot.
