Steel Rod and Corrugated Iron Production Costs Rise Due to Fuel and Electricity Prices
Photo: Agamir Somoy
Production costs of steel rods and corrugated iron sheets have increased due to higher fuel and electricity prices. The cost of producing per ton of rebar has risen by BDT 5,275, driven by higher production expenses, transportation costs, port charges, raw material price increases, VAT, and advance income tax.
Electricity costs alone have increased by BDT 1,800 per ton. Transportation costs have risen by BDT 400 due to higher fuel prices. Port charges increased by BDT 175, raw materials by BDT 500, advance income tax by BDT 600, and VAT by BDT 1,800.
Mill owners have proposed reducing VAT in the upcoming budget to ease production pressure in this sector. The country’s demand for iron-based products currently stands at around 12 million tons. These products are produced in 7–8 large factories in Chattogram and 20–25 small to medium active factories in Dhaka.
On Tuesday, the factory price of rebar from leading producer BSRM was BDT 95,000 per ton. Industry leaders have urged the government to take steps to keep prices affordable in the upcoming budget. According to BSRM Deputy Managing Director Tapan Sengupta, reducing VAT and advance tax could slightly lower prices. He also noted that without increased government development projects, market demand remains weak, which could force factories to shut down.
Total demand for iron products has fallen from 12 million tons to around 6 million tons, mainly due to slow government development activity and overall stagnation.
KDS Group’s KY Steel, a major corrugated iron producer, reported a 7% increase in production costs per ton. Managing Director Selim Rahman said the rise is mainly due to higher fuel and electricity prices.
Currently, 282-piece corrugated iron sheets are priced at BDT 60,000 per ton, while 175-piece sheets sell for BDT 120,000 per ton. Thinner sheets are relatively cheaper, while thicker sheets are more expensive.
