Steel sector’s operational cost rises 65% in a year

The country's steel sector experienced a 65 percent jump in operational cost in the last one year due to the appreciation of the US dollar and a rise in utility bills, said Mohammad Jahangir Alam, president of Bangladesh Steel Manufacturers Association (BSMA).

The US dollar's appreciation caused the 40 percent rise in the operational cost and utility bill hikes attributed to the rest 25 percent spending jump, he said today.

Alam shared the information at a press conference on "Serious crisis of steel sector due to price increase of dollar, power and energy".

The BSMA, which represents some 41 large steel producers, organised the event at the Economic Reporters' Forum in Dhaka.

The loans given to the steel sector may turn sour as the rising operational cost is weakening the financial capacity of the sector's investors, Alam said.

Banks are also failing to open letters of credit (LCs) as per the requirement for importing steel raw materials because of the shortage of the American greenback, he said.

The amount of raw materials currently being imported is insufficient to meet the sectoral demand, which is disrupting the whole supply chain of the steel sector, he said.