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Steel Industry faces crisis due to rising scrap prices

Industry: Building Material, Steel

The steel industry in Bangladesh is facing multiple challenges that are putting pressure on businesses in the sector. The Covid-19 pandemic, the Russia-Ukraine war, the country’s dollar crisis, and increasing demand for steel due to large-scale infrastructural rebuilding projects in Turkey and Syria have all contributed to higher raw material prices in the international market and supply chain disruptions.

Entrepreneurs in the country’s steel sector have reported that the situation has forced them to cut down on rod production by 40%-50%, making it difficult for businesses to stay afloat. Factory owners are struggling to meet operational expenses, including employee salaries, due to the decline in production and sales. Scrap ship prices in the international market have risen from $525 per tonne to $575 per tonne over the past month, and scrap prices have also increased from $430 per tonne to $460-$465 per tonne. The price of scrap and MS rods in the domestic market has also become unstable due to the impact of the international market. Entrepreneurs are demanding the removal of obstacles in the import of raw materials to overcome the current crisis. The Bangladesh Shipbreakers Association has stated that if the price of scrap in the international market continues to increase, the ship-breaking sector will have to close down.

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