Rod prices keep skyrocketing

The prices of rod, a key construction material, continue to shoot up due to soaring dollar rates, fuel price hikes, and load-shedding impacts on manufacturing.

On Tuesday, branded and non-branded rod was selling between Tk 85,000 and Tk 98,000 per tonne across the country based on quality.

Traders said rod prices increased by Tk 3,000-4,000 in the last one week and their sales had slightly fallen.

Earlier in April, prices went up to Tk 1.02 lakh in districts, which was an all-time high in the retail market, while it was up to Tk 95,000 in Dhaka city.

Manufacturers pointed out several reasons behind the price rise, such as the weakening of taka against the US dollar, increased transportation costs due to fuel price hikes, and the impacts of the energy crisis on production.

Area-based prices

In Dhaka on Tuesday, BSRM rod was sold between Tk 97,000 and Tk 98,000 per tonne.

“I am selling AKS at Tk 96,000 per tonne and Bandar at Tk 95,000 per tonne. Retail prices rose by Tk 3,000-4,000 per tonne compared to last week as manufacturers have increased prices,” said Imam Hossain, proprietor of Akik & Sifat Steel Corporation in Old Dhaka.

An official of Khan Enterprise in Bashabo said Anwar Ispat rod was selling at Tk 92,000 per tonne.

Md Montu Mridha, proprietor of Mridha Enterprise in Shariatpur, said, “We are selling BSRM at Tk 97,000 per tonne and AKS at Tk 95,000 per tonne.”

“Prices are shooting up again like the pre-Eid-ul-Fitr time. At the time, prices reached as high as Tk 1.02 lakh,” he added.

Krisna Kanta Ray, manager of Mondal Steel in Rangpur, said he sold per tonne BSRM at Tk 97,000 and AKS at Tk 93,000. Prices were comparatively low in Narayanganj and Chattogram. BSRM was sold at Tk 96,000 per tonne and AKS at Tk 95,000 per tonne in retail in Narayanganj. Besides, several non-branded products were sold between Tk 85,000 and Tk 90,000 per tonne.

In the port city, BSRM was sold at more than Tk 93,000 per tonne and AKS at Tk 92,000 per tonne while non-branded products were sold for up to Tk 89,000 per tonne. 

Traders in Dhaka said they were spending around Tk 1,500 on transporting each tonne rod from Chattogram to the capital after fuel prices rose. Besides, truck fares doubled to Tk 1,000 to transport per tonne rod inside the city.

Bangladesh’s major rod manufacturing companies are BSRM, AKS, Bandar, Rahim Steel, Anwar Ispat, Kabir Steel, RSRM, Vikrampur Steel, GPH Ispat, and Shahriar Steel Mills. They meet 60-70 per cent of the local demand while non-brand companies cover the rest.

Manufacturers facing challenges

Rod producers claimed their production had decreased by nearly 30 per cent due to the ongoing gas and power crisis, which had also pushed up manufacturing costs.

BSRM Deputy Managing Director Tapan Sengupta told The Business Post prices may seem very high but are still reasonable compared to production costs. 

“Our production reduced by around 30 per cent due to the energy crisis. Dollar rates soared by around 28 per cent compared to March, but our product prices have not gone up proportionally,” he said. 

He said they sold rod at Tk 89,000 per tonne in March when one dollar was equivalent to Tk 86. “The dollar rate has now soared. Besides, transport costs rose by 25 per cent due to fuel price hikes.”

Tapan further said rod prices should be Tk 1.14 lakh per tonne considering the current production costs.

“We sold per tonne rod at Tk 93,500 in Chattogram today [Tuesday]. Dealers sell at more than that as they add transportation costs. Now if retailers sell at much higher prices, what can we do? We can only take action against our dealers if they make disproportionate profits.” 

He also said prices may reduce in future if raw material prices and the dollar rate go down and the overall situation returns to normalcy.

Bangladesh imported 28.3 lakh tonnes of ferrous scrap in the January-June period of 2022, up from 18.5 lakh tonnes in the same period last year. The local annual demand for rod is around 60 lakh tonnes. 

Real Estate and Housing Association of Bangladesh Vice-President Kamal Mahmud said a regulatory body is needed to set and control construction material prices as sudden price hikes vastly impact the market.

Our correspondents Saleh Noman from Chattogram, Emran Ali Sajib from Narayanganj, and Mohammad Zakir Hossain from Rangpur contributed to the report