Steel businessmen have warned that the price per ton of steel rods could increase by an average of Tk 3,560 due to rising electricity and fuel costs. The increase is attributed to a recent hike in electricity prices, which alone is expected to raise costs by Tk 1,785 per ton. Additional factors include increased fuel prices and port charges at Chittagong. The Bangladesh Steel Manufacturers Association (BSMA) has called for a rollback of the increased electricity prices, stating that the additional costs cannot be passed on to consumers without reducing sales. The association argues that the steel industry is already facing multiple challenges, including a construction sector slump, reduced demand, high interest rates, currency devaluation, dollar shortages, difficulties in opening letters of credit, capital shortages, gas supply crises, and rising transportation and logistics costs. The industry, which includes 40 modern steel mills and over 150 re-rolling mills with a combined annual production capacity of 12.2 million tons, is operating well below capacity, meeting only about 50% of the annual demand of 5 million tons. The BSMA has urged the government to reconsider its policies to support the steel industry, warning that further increases in costs could lead to industry collapse and job losses.
BSMA's Demands and Concerns
At a press conference held at the National Press Club in Dhaka, BSMA President Mohammad Jahangir Alam highlighted the industry's struggles and called for a rollback of the electricity price hike. He emphasized that the structural inefficiencies and capacity charges in the electricity sector are placing an unsustainable financial burden on the productive industrial sector. Alam warned that continued increases in costs could lead to reduced industrial production, discouraged new investments, job losses, and a weakening of the country's industrial competitiveness. He also expressed concern over reports of the National Board of Revenue (NBR) planning to impose new taxes on the steel sector, which he said would further increase rod prices beyond the consumers' purchasing power. BSMA General Secretary Suman Chowdhury called for the elimination of capacity charges, noting that the government had paid Tk 32,000 crore in 2023-24 and is expected to pay Tk 42,000 crore in the next fiscal year. He urged the government to renegotiate contracts and make the cost of capacity charges public. Chowdhury also called for greater transparency in government spending and urged the government to engage in discussions with industry stakeholders to address business challenges.
