The Bangladesh steel industry looks to secure a foothold in the global market with the sector beginning to bounce back from pandemic shocks, say industry leaders.
Bangladesh's steel industry is worth Tk55,000 crore ($62 million) and the country is globally the second largest destination for scrap ships and one of the largest ferrous scrap consumers with imports touching 4,000,000 tonnes. Its steel melting capacity is expected to reach 13,000,000 tonnes by 2025, speakers said at the 3rd Steel & Raw Material Conference, Emerging Bangladesh, held in Chattogram on Tuesday.
BSRM Group Managing Director Aameir Alihussain said that the steel industry has gone through a very difficult time due to the coronavirus pandemic, which led to an overall cost increase, including in freight charges, raw materials and transport. Then came the Russia-Ukraine war, which pushed up energy prices.
"Being a populous country, economic activities are always vibrant in Bangladesh, China or the South Asian countries. Yet people's lives are affected by the high prices of food and goods. Demand for steel is slightly down at the moment due to rising prices of everything," he said, adding, "We want to meet the domestic needs of the country and capture the world market. We are moving towards that goal."
In the keynote speech, Subhendu Bose, managing director of Singapore's Duferco Asia Pte Ltd, said that between 2017 and 2020 HRC prices ranged between $400 and $600 in Asia. Meanwhile HMS Scrap prices were ranging between $230 and $400. These price bands were maintained by lackluster global growth and stable costs.
"In 2021 the old price range was broken by a period of global steel deficit. Post-covid demand recovery was too sharp for steel production to keep up. In 2022 we have seen a new paradigm as demand is receding at most developed economies due to a combination of factors, including high cost of capital and high cost of energy," he added.
Local and foreign experts spoke at several sessions at the conference on the current situation and prospects of iron and steel products used in the country and abroad, increase in cost of steel raw materials, crisis and overall situation, quality, current sustainable technology, ship breaking industry, modern marketing policy.
Alhaj Sufi Muhammad Mizanur Rahman, chairman of PHP family, inaugurating the conference said, "Steel is the foundation of modern civilisation. The summit will play a positive role in the quality, value creation, and market expansion of the steel industry. All of us should work for the development of this industry."
BSRM Group Chairman Alihussain Akberali said, "This conference is very important for the country's steel sector. Steel product exporters from different countries of the world have participated in the conference. There are the top steel manufacturing companies of the country. It creates an easy connection between all the parties. Communicating directly with so many companies around the world would be expensive and difficult for many companies in the country."
The industry at present
A few days after the outbreak of the Russia-Ukraine war, which started on 24 February 2022, the steel market saw a significant steel export reduction from the region. The reduction was due to both military action in the case of Ukraine and western sanctions in the case of Russia and Belarus.
At present steel prices at all the main markets have stabilised, despite the state of steel consumption worsening due to sharp production cuts globally.
"While consumption is going from bad to worse, production cuts have been so big that forecasting market movement in the next weeks is very difficult – the changes are happening too fast and the current supply and demand balance is not clear," said Subhendu Bose.
The conference was arranged to explore key issues like the country's steel production and demand outlook, global scrap trade flow changes, especially in a post-Russia-Ukraine war situation, the ship recycling scene, key emerging sectors, price trends and a lot more.
Market leaders from 29 countries, including the US, Germany, Belgium, Australia, India, Austria, Taiwan, China and Japan, attended the conference.