The New Nation - Internet Edition

UNB, Dhaka

Country's steel and re-rolling millers are facing tough times as raw materials of the products shot up on the international market, thereby adversely affecting the housing sector. Moreover, the duty enhancement in the last budget has added to their production cost, which ultimately led to an abnormal price hike of MS rod and iron-bar on the domestic market, industry sources said. According to the sources, at present the 40-grade MS rods are selling on the markets at Tk 46,000 per ton while the 60-grade ones at Tk 55,000-60,000 per ton.

A year back, the 40-grade MS rod was selling at Tk 40,000 per ton while the 60-grade rod's price was Tk 52,000 per ton. This price rise has led to a major debacle for the country's real-estate sector that has to account extra expenses on the budgeted construction cost.

Bangladesh Re-rolling Mills Association General Secretary Sheikh Masadul Alam Masud blamed the duty enhancement in the country's present fiscal budget and sudden increase of the raw materials' prices internationally for the present crisis on the domestic steel market.

He said the caretaker government in the current budget enhanced the import duty on melting and re-rollable scraps and the sponge iron which are used as row materials in the steel and re-rolling mills for producing MS rods and iron bars.

The duty was doubled to 10 percent from the previous rate of 5. Similarly, the price of the raw materials was also increased on the international market to US$ 370 from US$ 240 per ton. Interestingly, Masud said, raw material-exporting countries depreciated the value of US dollars that put extra pressure to push up the raw material prices on the international market.

"Now, we have to import our raw materials at 30-40 percent higher rates than that of last year's price," Masud told UNB.

There are about 100 steel mills and more than 250 re-rolling mills in the country which annually produce about 20 lakh tons of MS rods and steel-bars to meet the growing demand from the real-estate and construction sector.

But facing such a difficult situation, Masud claimed that about 70 steel and re-rolling mills have already been closed down across the country.

He said in addition to the international market's odd situation, the steel and r-rolling millers have been facing some difficulties domestically as well.

Particularly, the importers of the raw materials now get only three days time to release their products from the port while previously the time was minimum 15 days.

Now the shippers start imposing surcharge on container stay at the port whenever it goes over more than three days.

In that case, the surcharge is imposed at 3 dollars for 20-foot container and 6 dollars for a 40-foot container per day. Moreover, the container charge has also worldwide gone up, which also contributes to increase in the production cost for the millers.For last couple of years, the prices of MS rods and steel-bars have been continuingly rising in the domestic markets.

Against this backdrop, the previous BNP-led alliance government waived all kinds of duties (about 32 percent) on the import of the steels' raw materials in the 2004-2005 fiscal when price of per-ton 40-grade MS rod was about Tk 20,000-22,000.

But the present caretaker government re-imposed the import duty, charging 5 percent on the import of melting scraps and re-rollable scraps.