Rod prices on the climb
Ship-breakers' work suspension in Chittagong that stopped scrap supply hiked the prices of lower-grade construction rod in Dhaka, traders and manufacturers said yesterday.
Mild steel (MS) rod prices have jumped by Tk 2,000-Tk 3,000 to Tk 41,000-Tk 42,000 per tonne on the local market over the last eight days after Bangladesh Ship Breakers Association (BSBA) enforced a strike on February 21.
The strike was meant to force the government to cancel a statutory regulatory order (SRO) that makes it mandatory for ship importers to submit pre-cleaning certificates before any ship enters the country's maritime territory.
After the order, Chittagong Customs barred at least 10 ships from entering the country's maritime territory, as they did not have pre-cleaning certificates.
Re-rolling mill owners in the capital said MS rod prices have increased as the supply of scrap, the raw material for 40-grade MS rod, became dearer following the strike.
"We didn't stock up on scrap much, because we didn't have to as its supply was smooth and prices were at tolerable levels," said M Abu Bakar Siddiqui, general secretary of Bangladesh Ro-Rolling Mills Association.
He fears re-rolling mills will soon run out of scrap stock, which would ultimately stop 40-grade rod production.
The country has over 250 re-rolling mills, which along with 100 steel mills make around 2.5 million tonnes of MS rod to meet domestic demand.
MS rod prices have also increased in Chittagong after the strike was enforced by BSBA that meets almost all of the demand for scrap in the country.
Earlier, following a writ petition on March 18, 2009, the High Court (HC) directed the government to make sure all ships are clean before they enter the country.
In line with the HC order, the commerce ministry amended its import policy order in January, making it mandatory for ships to have such certificates.
But ship breakers demanded that the government reverse the decision, saying it is not possible to manage such certificates for some technical problems.
Describing BSBA's grounds, its Vice President Kamal Uddin said: "Ships move from port to port. If a ship is stationed in the Indian Ocean when it is sold and its owner lives in the US, then the ship will have to travel all the way to America for a certificate, which will be a complicated, painful procedure."
The export or import of foreign ships without pre-cleaning certificates is a violation of Basel Convention 1989, which Bangladesh has already ratified.
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