Bangladesh’s production of crude steel has experienced a significant decline, reaching a three-year low of 5.2 mln tons. This situation is indicative of reduced demand for primary construction materials due to decreased economic activities.
The recent disclosure of this data was made by the Brussels-headquartered World Steel Association, an international trade body representing the iron and steel industry.
Despite the adverse impacts of the Covid-19 pandemic, Bangladesh’s annual steel production remained steady at 5.5 mln tons in both 2021 and 2020. During these years, the country ranked 29th and 28th globally, respectively.
In 2019, steel production was 5.1 mln tons, and the global ranking stood at 30th. However, the ranking slipped to 31st as production declined.
Consequently, the per capita steel consumption in Bangladesh dropped to approximately 43kg in 2022, down from over 45kg in 2020. This figure is significantly lower than India’s 81kg and considerably behind China’s 645 kg.
Tapan Sen Gupta, deputy managing director of BSRM Group, the largest steel maker in the country, said per capita steel consumption is a major indicator of a country’s development.
Gupta explained that the public sector is the largest consumer of steel, holding approximately 70pct of the market share in the last few years. The slowdown in the execution of projects has resulted in a decrease in steel consumption.
He also said private sector investments have been sluggish due to stagflation, characterized by slow economic growth and high inflation.
Moreover, Gupta mentioned that BSRM’s production was adversely affected last year due to power outages and a shortage of raw materials caused by the dollar crisis. BSRM produced 1.8 mln tons of rebar and 2.2 mln tons of billet in 2022, he said.
According to SK Masadul Alam Masud, the founder president of Bangladesh Steel Mills Association (BSMA) and managing director of Shahriar Steel Mills Ltd, the government has focused on implementing projects based on priority, thus limiting its development works.
According to Md Shahidullah, secretary general of BSMA and managing director of Metrocem Ispat Ltd, the decline in steel consumption is not solely attributed to the reduced demand from the public sector. He highlighted that the sluggish growth in both the housing and industrial sectors has also contributed to this decline.
Also, Shahidullah emphasized that the year-long crisis over the dollar and its appreciation against the local currency, the taka, have significantly increased import costs for steel manufacturers. He further explained that there have been instances where they faced difficulties in obtaining dollars and opening LCs (Letters of Credit) for importing necessary materials.
