Bangladesh’s steelmakers are facing higher production costs amid weak construction demand, with mills offering discounts to maintain sales, according to local media reports.
The price of 60-grade rebar has risen to BDT 92,500-94,500 (USD 752-769) per ton from BDT 88,000-92,000 (USD 716-748) a month earlier, according to the Trading Corporation of Bangladesh. However, actual selling prices remain under pressure as manufacturers absorb part of the higher costs through discounts.
The increase in industrial electricity tariffs by 17.86 pct in June, along with gas shortages, power disruptions and higher fuel and transport costs, has increased production expenses. Industry representatives said some mills are operating at only 50-60 pct of capacity due to inadequate gas and electricity supplies.
Weak demand is adding to the pressure, with market activity estimated at around 50-60 pct of normal levels. Steelmakers said they have been forced to balance higher production costs with customers’ resistance to price increases, resulting in discounts to secure orders.
Gas shortages are also disrupting reheating furnace operations, causing production losses and preventing mills from operating continuously. The combination of weak demand, rising costs and supply disruptions continues to squeeze steelmakers’ margins, the report added.
1 USD / 122.7 BDT