Home ›› 23 Feb 2022 ›› Front
Traders are blaming a supply crunch at the manufacturer level as the prices of rod – a basic building material – hits all-time peak in Dhaka, reaching as high as Tk 83,500 per tonne for the 60-grade variant and Tk 77,500 for the 40-grade variant.
Retailers further claimed that the rod manufacturers also hiked local prices citing supply shortages and price increase of raw materials in the global market, and are failing to supply the product at the retail level within the expected time frame.
According to the state-run organisation Trading Corporation of Bangladesh (TCB), traders in the Dhaka municipality area on Tuesday were selling the 60-grade rod for Tk 74,000 – Tk 82,500 per tonne, and the 40-grade for Tk 70,000 – Tk 77,500.
On the issue, Real Estate and Housing Association of Bangladesh (REHAB) Vice President Kamal Mahmud said, “Rod prices have never reached this high in Bangladesh’s history. A syndicate is behind such hikes in prices, and it continues to go up as Bangladesh has no pricing regulations.”
Proprietor of Metro Traders in Old Dhaka, Sanjay Chowdhury said, “We are now selling BSRM rods for Tk 83,000 per tonne, and Bandar Steel Industries Ltd rods for Tk 77,500. Rod prices have increased significantly after Covid-19 hit the country.
“We are not getting products in time after placing orders. Manufacturers are not supplying rods. There is nothing we can do about the price hike as we sell rods with little profit. The market mostly depends on manufacturers.”
ALSO READ: Construction gets costlier as rod prices soar
Mahbub Hossain, proprietor of Munshi Steel Corporation at Badda, said, “I am selling BSRM rod at Tk 83,500 per tonnes, AKS (Abul Khair Steel) at Tk 82,500 and RRM (Rani Re-Rolling Mills Ltd) at Tk 77,500.”
Solaiman Khan, who is building a home in Demra, said, “Not only rod prices, but the prices of all building material has gone up. Rod prices have increased by Tk 15,000 – Tk 20,000 in just a year, and I am now buying the material for Tk 83,500 per tonne.
“The skyrocketing prices of building materials are a putting a serious squeeze on the people’s wallets.”
Manufacturers raking in profits
Industry insiders said there are nearly 100 rod manufacturers in Bangladesh.
According to latest annual report of BSRM Steels Ltd, the company’s net profit increased around 312 per cent in a year. The company’s net profit went up to Tk 305 crore in Fiscal Year 2020-21, which was Tk 74 crore in
FY2019-20.
The company produced 1,593,222 tonnes of Xtreme 500W, other MS rods and MS billet in FY2020-21, which was 595,857 tonnes in FY2019-20.
When contacted, BSRM Deputy Managing Director Tapan Sengupta said, “Now we are selling rods with a loss. The price should be Tk 85,000 per tonne as the price of raw materials gained a hike in the international market. However, the rod price is lower in Bangladesh in compared with India. Our market share is 22-25 per cent against the annual demand of 65 lakh tonnes of the construction essential.”
He also said that Bangladesh has to depend on import of the scrap material. So the price will come down if the raw material price reduces in global market.
“We don’t see any chances of lowering the price soon,” he pointed out.
Commenting on the matter, Executive Director of Bangladesh Steel Manufacturer Association Md Shamsul Alam said, “Rod prices increased due to raw material price hike in the international market.
“Bangladesh has to import raw materials to produce the basic construction item. So, our market goes up or down based on international market rates. Raw material prices increased vastly due to the Covid-19
pandemic.”
Adding that the prices of various chemicals used to manufacture rods have increased too, Shamsul said, “We will organise a press conference about the market situation at the National Press Club on Wednesday, and formally provide details regarding the price hike.”
‘Need a regulator’
Recommending a solution, REHAB Vice President Kamal Mahmud said, “There is a need for a regulatory body who will fix prices in the market. Because we have no such regulator, businesses increase and decrease building material prices at will.
“I am urging the commerce ministry to take an initiative on regulating the market prices. A designated regulator should inform the people at least two weeks before the building material prices are increased or decreased.”
The regulator should also introduce a formal process for prices to go up or down, he added.
It should be noted that the prices of sand and cement remain stable.
