Falling demand leads to rod, cement price drops

Prices of rod and cement, two key construction materials, have begun to drop in the face of falling demand, offering a relief to contractors of different government projects.

When the economy was crawling back to normalcy having dispelled pandemic blues, surging prices of building materials had brought construction to a halt. 

Many people stopped construction, while many others were struggling to continue the work, with rod and cement prices hitting a record high.

Now, those involved in construction can heave a sigh of relief as prices of mild-steel (MS) rod dropped by Tk6,000-Tk8,000 per tonne, while cement saw its prices fall by Tk20-Tk40 over the last two weeks.

Premium quality (75-grade) rod now sells at Tk80,000-86,000 per tonne with a drop from Tk87,000-Tk92,000 a month ago.

On Thursday, among 75-grade (TMT) rod of different brands, BSRM was sold at Tk86,000 per tonne, KSRM at Tk85,500 per tonne, AKS and GPS at Tk85,000 per tonne, Golden at Tk81,500, SASM at 80,500, Baizid at Tk81,000 and HM Steel at Tk81,500.

Sekandar Hossain Tinku, chairman at KR Steel, said scrap prices have risen abnormally in the international market over the last one and a half years owing to the supply crisis, which has fed into an astronomical jump in rod prices locally. As a result, its sales decreased in the domestic market. 

The falling demand has caused prices of rod and scarps to gradually come down, he added.

Industry people have linked the price drops also to a decrease in prices of rod and cement making raw materials.

Prices of rod-making raw materials – scrap, plate and  billet – have also come down over the last one month. At present, per tonne scrap is being sold at Tk56,500 from Tk65,000, plate at Tk63,000 from Tk71,000 and billet at Tk71,000 from Tk80,000. 

Cement prices have also registered a fall by Tk20-Tk40 per bag. Its prices had jumped up to Tk80 per bag as imports of its raw material clinker were disrupted under the Russia-Ukraine war.

Among the different brands of cement, Ruby is currently being sold at Tk475 per bag, Royal at Tk455, Seven Ring and NGS at Tk445 and S Alam at Tk435.

Kamal Pasha, managing director of the Muharram Ship Recycling Industry in Sitakunda, Chattogram, said rod prices had been on an upward trajectory for almost a year and a half, from November 2020 to March this year. Its prices have almost doubled during the period.

The reduced rod sales caused its prices to fall, he added.

Ayub Ali, owner of Baghdad Steel, a rod trader in Chattogram, said rod sales have dropped by 70-80% in the last one month following its price hike to Tk88,000-Tk92,000 per tonne.

Most people have stopped construction owing to the unusual increase in rod prices. Work on many government projects have come to a standstill too for non-adjustment of prices, he noted.

A relief for project contractors 

In the meantime, contractors engaged in work on various government projects have got relief as the prices of construction materials have come down a bit. 

They said the pace of project work slowed down in the last few months due to rising prices of building materials. The prices have come down a bit; they now want to resume work in full swing and finish as early as possible.

Engineer Sohail Rana, project manager at Biswas Builders, an organisation engaged in the implementation of waterlogging mitigating projects in Chattogram, said, "In the last one-and-a-half years, prices of construction materials have gone up by 20%-50% and our projects were on the verge of closing down. Because of the increase in prices, we have had to count losses."

"We have started working again in full force with prices having come down a bit," he also said.

Mezbah Uddin, owner of Mezbah Associates engaged in various road and highway development work, said, "We are now trying to finish work as construction material prices fell a bit."