Steel makers yesterday called for slashing of customs duty and advance income tax on the import of scraps, a non-negotiable raw material for steel, to arrest the escalating prices in the local market.
At present, the customs duty for scraps is Tk 1,500 per tonne and AIT Tk 800.
Manwar Hossain, chairman of the Bangladesh Auto Re-rolling and Steel Mills Association, requested lowering the customs duty to Tk 500 and AIT to Tk 400 at a press briefing held at the National Press Club in Dhaka.
“The production cost of steel rod has increased abnormally in the last three months,” Hossain said.
Rod prices are spiralling with the soaring prices of melting scraps in the international market in the wake of US's announcement of 25 percent and 10 percent tariffs on steel and aluminium imports respectively from March 23.
The US, the world's largest economy, generates 60 percent of the global scraps, and American millers have been stockpiling it upon anticipation of the protectionist move by Trump administration, escalating the prices in the global market. The price of each tonne of scrap, which was $310 in the third quarter of 2017, now stands at $435, according to Hossain.
Bangladesh requires 40 lakh tonnes of scraps to make billet for manufacturing steel, according to the BARSMA.
Of the sum, 35 lakh tonnes are imported and the rest is collected from ship-breakers and domestic market, according to Tapan Sengupta, executive director of BSRM, one of the biggest steel manufacturers in Bangladesh.
Besides, the production costs for per tonne of steel have increased by Tk 1,708 due to the appreciation of the dollar against the taka and Tk 700 for the increase of interest rate from 9 percent to 12 percent, Hossain said.
“If the situation goes on like this for another 2-3 months, the prices would further escalate.”
On the first day of January, each tonne of 60-grade rod sold for Tk 53,500-Tk 54,500 in Dhaka city. Yesterday, they went for Tk 71,000-Tk 72,000, according to the Trading Corporation of Bangladesh.
Hossain, who is also the managing director of Anwar Ispat Ltd, said the rod prices were recently slashed by Tk 3,000 per tonne after the government assured steel manufacturers that their demands would be met.
The price would come down by Tk 5,000 per tonnes if the government slashed the customs duty and AIT as per the steel makers' demand, he said.
Shafiqul Islam, general manager of RSRM, and Md Shahidullah, managing director of Metrocem, were present, among others.