Decline in rod sales threatens Tk7,50,000cr investment

Sales of construction rods have plummeted by 70% in the past four months, posing a significant threat to investments worth Tk7,50,000 crore across 200 steel rerolling mills, according to industry insiders.

This sharp decline follows a political shift in August, which has stalled infrastructure projects nationwide and severely impacted the steel industry.

Steel manufacturers, including 40 leading companies, have drastically reduced production to meet the dwindling market demand.

Retail prices of rods have dropped by Tk6,000 per tonne, but manufacturers are struggling

with soaring operational costs due to the rising dollar rate, which has inflated raw material import expenses.

The absence of elected local government representatives has further stalled development projects at the city corporation, upazilas and union levels.

Market observers attribute the slowdown to contractors linked to Awami League politics halting personal and commercial projects, alongside real estate developers scaling back due to inflation and restrictions imposed by the Detailed Area Plan.

Entrepreneurs warn that prolonged political uncertainty and the suspension of government-funded projects could lead to long-term losses for the steel industry.

A visit to rod and cement shops in Dhaka’s Karwan Bazar, Mohakhali and Kuril areas revealed that BSRM rods are being sold at Tk95,000 per tonne, while GPH Ispat, AKS and KSRM are priced at Tk92,000 per tonne. Anwar Ispat rods are available at Tk90,000 and brands like SS, HRMM and SCR range between Tk85,000 and Tk87,000 per tonne.

Mohammad Yusuf Sohag, proprietor of Al-Tabuk Agency in Karwan Bazar, lamented the dire situation, saying, “We have been in the rod and cement business since 1985, but we have never seen such bad times. Almost all government and private infrastructure projects have stopped since the political change, leading to a 70% drop in sales.”

Similarly, Tasin Rahman Helmi, proprietor of Helmi Enterprises in Kuril, reported selling only 450 tonnes of rods per month, down from over 2,000 tonnes.

“We are struggling with shop rent, employee salaries, advance taxes and bank loans. If this continues, survival will be impossible,” he said.

According to the Bangladesh Steel Manufacturers Association (BSMA), the country has around 200 steel factories, including 40 large companies, with an annual production capacity of 110 lakh tonnes. Local entrepreneurs have invested Tk7,50,000 crore in the steel rerolling sector, which supports an annual rod consumption of 75 lakh tonnes, generating a turnover of Tk70,000 crore.

BSMA Founding Chairman Sheikh Masadul Alam Masud highlighted the broader impact on related industries.

“The rod market has been struggling since early last year, worsening after the political shift on 5 August. Eighteen sectors, including cement, bricks, sand and stone, are directly tied to rods, involving one crore people,” he said.

Masud, also the managing director of Shahriar Steel, hoped that resuming development projects would stabilise the market.

“Production has been reduced by almost half and rods are now being sold at a loss to keep factories running. However, this situation is unsustainable,” he added.

BSRM Group, one of the largest players in the sector, has scaled down production significantly. Its annual production target is 18 lakh tonnes, but only two of its four modules at the Mirsarai unit are operational.

BSRM officials said that sales have dropped by more than 50% due to political instability, forcing further cuts in production.