A pricing dispute between ship-breakers and steel re-rolling mills in Bangladesh has halted steel production for, causing operational challenges for re-rolling mills due to a shortage of scrap steel. Ship-breakers raised the price of scrap steel from Tk 65,000 to Tk 68,000-Tk 70,000 per tonne, leading to an impasse. Small re-rolling mills, unable to directly import scrap steel, rely on ship-breakers for raw materials. This increased cost threatens to drive production costs to nearly Tk 100,000 per tonne, forcing some mills to shut down.
Around 150 small-scale mills are dependent on re-rolling mills, while ship-breakers supply approximately 1.2 million tonnes of scrap steel, comprising 15% of the industry’s raw material demand. Ship-breakers cite profit margin concerns, having reduced prices previously in line with international market trends. Both sides emphasize the need for swift resolution to protect business interests and avoid financial losses.
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