Bangladesh steel makers at a meeting with Industries Minister Dilip Barua voiced grave concerns over the continuous depreciation of the local currency against the dollar.
They told the minister that they incur a loss of BDT 14,000 in manufacturing each tonne of mild steel rod while another BDT 2,000 for enhanced electricity tariff.
Mr Sheikh Masudul Alam Masud president of Bangladesh Auto Re rolling and Steel Mills Association said that “The production cost of steel rod is going beyond our affordability.”
At present, each tonne of 60 grade MS rod is selling at BDT 67,000 per tonne to BDT 68,000 per tonne and 40 grade at BDT 60,000 per tonne to BDT 62,000 per tonne.
The steel millers said the price may go up anytime soon. The meeting took place at a time when the dollar traded at BDT 84 against BDT 70 last year.
The country has about 300 re rolling and steel mills with an annual production capacity of about 3 million tonnes. Most of these mills depend on imported scrap and imported abandoned ships for their raw materials. After the increase in the US dollar price, the steel manufacturers have to count additional expense on importing raw materials.
Urging immediate steps to address the problems, the steel millers said if the government fails to contain the depreciation of the taka and control power tariff, the increased production cost will finally push up the expense of the contractors who mainly execute the government's annual development program.
Mr Abul Qassem Majumder secretary general of the association said that “If the contractors refrain from executing the ADP on an account of increased cost, the total development works will get stuck up.”
The association leaders also referred to some anomalies prevailing in the duty structures of some of their raw materials.
Mr Barua urged the steel manufacturers not to increase the prices of steel products as these are the basic materials for construction. He also said the government's policy is to reduce duties on raw materials that are used in the import-substitute industries.
(Sourced from www.thedailystar.net)
