Prices of rods, the key element in building construction, hit an all-time high on Thursday.
On the day, a tonne of 75-grade mild steel (MS) rods sold for Tk90,000-93,000 at mill gates, up some Tk5,000 from Tk84,500-88,000 a week earlier.
The price of 60-grade MS rods, produced at automated or semi-automated mills, also increased Tk5,000-6,000 per tonne.
Earlier in March this year, 75-grade MS rod prices hit a high of Tk92,000 per tonne, having gradually risen over the past one and half years. Later, in July the price fell to Tk82,000 per tonne.
In 2020, the price of the key construction material hovered at only Tk55,000 per tonne.
Talking to The Business Standard (TBS), millers said lower imports of key raw material scrap due to soaring dollar prices and the recent hike in fuel prices were the reasons for the record rod prices, while local traders blamed millers.
"The entire Ispat-manufacturing sector is now going through bad times. We are now forced to pay much higher for import payments of scrap due to unusual dollar price hikes. For the same reason, scrap imports have declined," said Mohammad Sarwar Alam, director of HM Steel and Industry Limited.
"Moreover, a shortage of gas and the recently started load shedding has taken a toll on us with a substantial increase in production costs," he told TBS, adding that all these factors have contributed to higher rod prices.
Several other entrepreneurs said the price of rods was on the rise over the last month and it increased by Tk10,000 in some cases.
Humayun Kabir, a rod trader and owner of Khaja Metal in the Colonel Hat area of Chattogram city, said the rod market has been unstable for more than one and a half years, although there has been a downward trend for three months in the meantime.
"It is normal for rod prices to increase slightly due to higher scrap prices, the dollar crisis and higher fuel prices. But, a syndicate of rod manufacturers is also manipulating the market," he told TBS.
Once there were more than fifty small and large rod manufacturing factories in Chattogram alone. But, many of them stopped production over the last few years. Now 10-15 companies are dominating the entire rod market.
Meanwhile, the price of local scrap has also increased by Tk5,000-7,000 to Tk65,000 per tonne over the past week. It was only Tk45,000 before Eid-ul-Azha.
Besides, plate and billet prices have also jumped Tk6,000-7,000 to Tk80,000-81,0000 per tonne this week, which was Tk60,000-62,000 early last month.
Entrepreneurs in the ship-breaking industry that supplies scrap to rod-manufacturing companies said scrap imports declined slightly due to higher booking rates in international markets in March and April this year.
However, since the beginning of May, global scrap prices have been falling, which should have increased Bangladesh imports.
"But, it did not happen due to high dollar prices, and the country could not benefit from the price fall," said Kamal Pasha, owner of Mohoram Ship Recycling Industries. "Scrap and MS rod prices have also increased in the country."
Sikandar Hossain, the owner of KR Ship Breaking Yard, said the price of scrap and old ships has dropped a lot in the world market over the last three to four months. "Now, if our imports increased, the price of both scrap and rods would come down in the local market," he told TBS.