Steel millers demand lending-rate cuts

Steel and re-rolling millers yesterday urged the government to reduce bank interest rates and put a cap on the dollar exchange rate to rein in an unusual rise in prices of construction materials.
They said the abnormal devaluation of the taka against the dollar and higher lending rates have already affected the prices of two basic construction materials -- steel and rod -- in the local market.
Moreover, the scarcity of dollars in the banking sector and the price hike of gas and power have affected the cost of production at the factory level, they said.
“This has increased the price of billet and scraps by
Tk 18,000 a tonne compared to last year,” SK Masadul Alam Masud, chairman of Bangladesh Auto Re-Rolling and Steel Mills Association, told reporters at Dhaka Reporters Unity.
As a result, the price of 60-grade MS rod reached
Tk 72,000 a tonne from Tk 62,000 a tonne a month ago, while that of 40-grade MS rod reached Tk 65,000 from Tk 55,000 a tonne during the period, he added.
Though the millers have recently adjusted the price by Tk 10,000 a tonne, they are still counting a loss of Tk 8,000 a tonne, he said. The millers said the sale of MS rod has slowed after the recent price adjustment.
“We have to cut production due to stagnation. But if we reduce our output, the production cost will go up, which will damage the sector further,” said Abul Kashem Majumder, secretary general of the association.
He said the whole economy would be affected if the government does not take necessary steps to solve the problem.
“If the rod and steel prices go up further, the implementation of the government's development projects will slow down,” said Majumder.