Steel prices set to rise in Bangladesh: analysts

Globally steel raw material prices are stable now, but Bangladesh will have to spend higher for its import because of the US dollar rate hike since the introduction of the crawling peg system, analysts said today.

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"Despite the stable international rates, the import cost of scrap steel will increase in Bangladesh as US dollar prices have increased substantially in the country," said Abhijeet Mahanta, marketing and sales director for South Asia at Atlas Commodities in India.

He spoke at a session of the fourth Bangladesh International Trade Summit 2024 at Pan Pacific Sonargaon in Dhaka. Bigmint, a platform for price reporting, market intelligence and consulting for commodities of India, organised the summit.

Bangladesh's steel sector annually needs six million tonnes of scrap steel, where imports meet 90 percent of the demand and the rest come from the local market, the industry insiders said.

Import of finished steel is prohibited in Bangladesh so the local millers need to collect scrap steel from local and foreign sources, said Sanjoy Kumar Ghosh, head of supply chain management at BSRM Bangladesh.

The steel sector has great potential in Bangladesh, as the country needs huge infrastructure development which will require a continuous flow of steel, he said.

Steel demand is low at present in Bangladesh due to the ongoing economic vulnerability, but, Ghosh believes, the situation will improve in the next one year.

The steel millers suffered supply chain disruptions in the last few years because of the Russia-Ukraine war, he said.

"The use of scrap steel is increasing in the USA and India, for which we are now looking for new sources in Australia, Malaysia and West Africa to meet our demand for steel raw materials."

The growing demand has also created a supply shortage of scrap steel, said Salehin Musfique Sadaf, director of GPH Ispat Bangladesh.

India annually imports 70 million tonnes of scraps to meet its national demand of around 90 million tonnes, said Ranjit Kumar, head of sponge iron trading at Tata International of India.

The global prices of scrap steel may increase in the days to come, but Bangladesh would not face any scarcity of such raw materials thanks to its geographical location, he said.

Zain Nathani, managing director of Nathani Group of Companies in India, moderated the session of the two-day summit, which will end tomorrow.

About 450 delegates, including industry leaders, policymakers, traders, and investors, from 35 countries, including Bangladesh, Germany, Australia, Turkey, India, Austria, Russia, Taiwan, China, Japan and America, took part in the summit.

Mill owners along with mill machine manufacturers, industrial consultants, materials suppliers and industrial group engineers also participated in this conference.