Prices of rod will come down by Tk 4,000 per tonne if the government withdraws the weight limit in carrying goods by trucks and eases congestion at the Chittagong port, said the industry association.
It came at a meeting of Commerce Minister Tofail Ahmed with the leaders of the Federation of Bangladesh Chambers of Commerce and Industry, importers, steel millers, realtors at the ministry.
Rod prices shot up by over 41 percent to Tk 73,490 a tonne last month from Tk 52,000 a tonne in February, according to the Bangladesh Auto Re-Rolling and Steel Mills Association (BARSMA).
In fact, rod prices started to go up gradually since the beginning of the year largely due to soaring prices of melting scraps in the international market amid the US move to slap tariffs on steel and aluminium imports.
The increased import costs for the weakening of the taka against the US dollar, the higher transport costs owing to the restriction on overloading, and the congestion at the port contributed to the hike of the prices of rod, millers said earlier.
Steel millers said previously a truck could carry 20 tonnes of goods at a time, but since December last year the Roads and Highways Division said a six-wheeler will be allowed to carry a maximum 22 tonnes, which includes the weight of the vehicle itself.
The restriction, which came into effect from December 1, aims to ease pressure on the roads and highways.
Due to the increase of the transport cost, the price of rod went up by Tk 688 a tonne. An additional Tk 688 was added to the price per tonne because of the port congestion, said BARSMA Chairman Manwar Hossain at the meeting.
He said the price of scrap import rose by 37 percent, sponge iron by 38 percent, and ferroalloy by 27 percent.
The swings in the exchange rate, regular power failure, and higher bank interest rate also contributed to the higher prices of the key construction material.
Because of all of the factors, the cost of rod went up by Tk 18,419 a tonne, according to Hossain. However, Shafiul Islam Mohiuddin, president of the FBCCI, disagreed with Hossain. Mohiuddin suggested the government form a committee headed by the commerce secretary which would submit a report on rod prices to the ministry within seven days.
Munir Uddin Ahmed, president of the Bangladesh Association of Construction Industry, said because of the factors raised by the BARSMA, rod prices could go up by a maximum 14 percent, but it rose by nearly 50 percent all of a sudden. As a result, the construction sector is facing a severe crisis, he said. Mir Nasir Hossain, a former president of the FBCCI, said rod prices have increased every day in March.
The prices of rod can't make such a jump only because of the transport cost and the exchange rates fluctuation, he said.
“Previously, rod and cement manufacturers used to call us to sell their products, but now we can't reach them over phones as the prices have gone up,” said the former FBCCI president.
Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh, said prices of rod, cement and stone went up abnormally before the beginning of the construction of mega projects such as metro rail.
If the construction of all the mega projects starts in full swing, the prices of these products will go up further, he said.
Mostafa Kamal, president of Bangladesh Cement Manufacturers Association, said the prices of every 50-kg bag of cement rose by Tk 60 over the last 25 days due to higher cost of clinkers, the main ingredient of cement, and transport costs. The businessmen suggested the government revise the duty structures on imported items.
In reply, the commerce minister said he would sit with the finance minister soon so that the duty structures could be revised.