Rod, scrap market stagnates 

The construction material market for MS rods and the scrap raw material for it has come to a standstill due to an incremental increase in prices over a long time.

Entrepreneurs and traders in the sector said rod and scrap markets have stagnated as the demand for rod declined significantly after rod prices almost doubled over the last one and a half years.

They said the prices of the two products have recently come down by Tk4,000-Tk8,000 per tonne when demand and sales decreased drastically. But this decrease in prices is yet to have any impact on the market.

Sarwar Alam, director of Golden Ispat, said, "The price of scrap has decreased $20-30 in the international market. As a result, in the last two-three weeks, rod prices have decreased Tk5,000-6,000 per tonne in the domestic market. But, the decrease in price failed to have any impact as sales already fell 80-85% during the last one and a half months after prices reached their peak. There is almost no demand for rod at the individual level now; only some government projects have a little demand for rod."

"We used to sell an average of 1000 tonnes of rods per day, but at present, only 250-300 tonnes are sold," he added.

Md Jashim Uddin, senior general manager (marketing and sales) of the KSRM Group, said, "To combat the liquidity crisis and bear emergency expenses, the price of melting scrap in the local market has come down slightly on the occasion of Ramadan and ahead of Eid."

"However, the price of scrap in the international market has not decreased significantly. During the same period, the price of rods saw a slight downfall. Buyers and dealers think that the price of rods may go down further due to the reduction in the price of scrap. Due to this, the demand and sales of the product have decreased a bit. Although the price of scraps may see an increase due to supply shortage subject to prolonged Russia-Ukraine war," he said.

In the last two weeks, the price of 75-grade (500 TMT) rod has come down to Tk4,000 in the market. At present, 75-grade rods of different brands sell for Tk85,000-Tk85,500. Two weeks ago it was Tk87,000-Tk91,000.

According to traders, rod prices went up incrementally from November 2020 to March 2022. During this time, the price of the product has almost doubled. As a result of the increased costs, construction work in housing and other sectors has come to a halt, resulting in reduced sales which ultimately brought down the price of the product.

Wholesale rod trader SM Kamruzzaman, proprietor of Zaman Enterprise in Chattogram's Asadganj said, earlier an average of 200-250 tons of rods sold every day. But abnormal price increases have gradually reduced rod sales, and at present, only 20-30 tons of rods are sold every day. 

"Most people have stopped construction work due to the unusual increase in rod prices. Even the implementation of many government projects has come to a standstill. As a result, product demand and sales have decreased significantly," he added.

Sekander Hossain Tinku, chairman of KR Steel said, usually, ship breaking yards have 15-16 lakh metric tons of scrap stock, but at present, the stock has gone down to only six lakh metric tons.