Rod costs drop as rains dampen demand

The worth of delicate metal (MS) rod of grade 60 has gone down barely since Thursday due to a decline in demand attributable to a slowdown in development and bodily infrastructure improvement works for the monsoon rains.

In keeping with the Buying and selling Company of Bangladesh, every tonne was retailing at Tk 99,500 on Thursday whereas earlier it was Tk 101,500.

“Demand has come down because of the rains,” mentioned Tapan Sengupta, deputy managing director of Bangladesh Metal Re-Rolling Mills Ltd (BSRM).

“…all development work together with authorities tasks beneath annual improvement programme have been going gradual because the begin of the wet season. For that reason, producers have decreased the worth,” he mentioned.

Simply 4 months in the past Bangladesh’s development sector was dealing with challenges attributable to frequent hikes within the worth of MS rod and different main development supplies whereas gradual improvement actions put many staff out of a job, based on business individuals.

The price of MS rod crossed Tk 1 lakh per tonne in March for an increase in manufacturing prices fuelled by growing gasoline and power costs amidst a US greenback disaster.

If purchased straight from the corporate, the costs are even decrease, round Tk 95,500 to Tk 97,500 per tonne, mentioned Sengupta.

There may be scope to cut back the worth additional as scrap iron, the uncooked supplies for making metal, had now grow to be cheaper, round $430 per tonne, whereas earlier it was $560 within the worldwide market, he mentioned.

Nevertheless, with restrictions on opening letters of credit score (LCs) but to be withdrawn, producers nonetheless can not import the low-priced scrap iron, he mentioned.

Kabir Metal Re-Rolling Mills Ltd (KSRM) is providing every tonne at Tk 96,000 on the mill gate whereas earlier it was Tk 97,000 crore, mentioned Md Jashim Uddin, director (gross sales and advertising).

He believes the worth would proceed to go down all through the wet season, which lasts till October.

Nevertheless, there will probably be no important change in costs because the producers can not avail the low-priced scrap iron for the restrictions on opening LCs, he mentioned.

Costs have gone down owing to low demand and a discount within the worth of scrap iron in worldwide markets, mentioned Abu Jubaid Md Rassel, head of promoting at Anwar Ispat.

“Throughout wet season in Bangladesh the demand for metal barely goes down whereas improvement actions of the federal government go gradual. For that reason, demand for metal declined and worth has additionally come down,” he mentioned.

In keeping with him, costs on the mill gates have been ranging between Tk 95,500 and Tk 97,500 relying on the model.

The downtrend will proceed till October with the demand decreasing by a minimum of 30 per cent, he mentioned.

The federal government purchases over 40 p.c of the business’s metal and the discount in improvement spending amidst the financial disaster understandably will have an impact metal consumption, he mentioned.

Nevertheless, the worth won’t fall drastically as had been throughout the pandemic, he mentioned.