Rod price recovers as demand, scrap costs climb

The price of mild steel (MS) rod has inched up in recent months, supported by seasonal construction demand and a rebound in international scrap steel prices since December.

Data from the Trading Corporation of Bangladesh (TCB) and industry sources show that the price of 60-grade MS rod has risen by roughly 2 percent, from around Tk 84,000 per tonne in October to Tk 85,500 by the second week of January.

Despite the recovery, prices remain well below the mid-2024 peak of nearly Tk 1 lakh per tonne. Last year, per tonne 60-grade MS rod prices retailed at a maximum price of Tk 89,000 in early August, before falling to Tk 86,000 in September.

Industry insiders attribute the recent increase partly to higher global scrap prices. Imported scrap rose by about $20-$30 per tonne from autumn lows, driven by renewed buying from major consuming markets, particularly Turkey, along with winter-related supply constraints in Western countries.

According to market participants, international scrap prices fell to around $336 per tonne on a CFR (cost and freight) basis during September and October, with some transactions reported even below that level. By early December, prices had rebounded to the $360–$370 per tonne range.

“The price increased due to a slight rise in seasonal demand during winter, which is the peak season for the construction sector, as well as a commercial adjustment following the global scrap price hike,” said Tapan Sengupta, deputy managing director of BSRM, a leading steel manufacturer.

He said the sector has been facing weak demand for more than a year and a half following political changes, as many development projects were put on hold and local government bodies lacked elected representatives to approve construction plans.

Still, he estimated that demand for rods has risen by up to 10 percent compared with the lean season.

Bangladesh’s monthly MS rod demand has fluctuated significantly from mid-2024, falling from around 6.5 lakh tonnes to about 4 lakh tonnes during lean periods amid economic uncertainty and lower government spending, according to the Bangladesh Steel Manufacturers Association (BSMA).

“This rise in demand is still not enough to reach the levels seen after the Covid-19 period or to help the industry grow at a healthy rate,” Sengupta said, adding that the current trend may nevertheless offer limited relief from the prolonged slowdown.

Market participants noted that Turkey, the world’s largest seaborne scrap buyer, has been a key driver of the recent global price increase, amid tight supply and strong demand for January shipments.

Against this backdrop, local rod prices have risen by about Tk 1,500 per tonne over the past three months, particularly at smaller mills, according to industry insiders. Rising replacement costs due to higher scrap prices, along with volatile freight rates and longer lead times, have added further pressure.

Manwar Hossain, former president of the BSMA and chairman of Anwar Group, said the steel industry has been among the sectors hardest hit since the pandemic.

“Negative returns have caused serious capital erosion and forced many factories to shut down,” he said, adding that a price correction was overdue after a prolonged period of selling below cost.

He said millers are still selling rods at Tk 4,000 to Tk 6,000 per tonne below production cost to keep operations running.

Sumon Chowdhury, secretary general of the BSMA, echoed the concern, warning that a prolonged slowdown in construction activity could weigh on the broader economy.

“The government and the elected administration must urgently engage with the private sector to revive the construction industry,” he said, noting that thousands of businesses are linked to the sector. “If construction slows, the ripple effect spreads across many others.”

Chowdhury said an extended period of unusually low prices had led some buyers to adopt a “wait-and-see” approach.

However, with global scrap supply tightening and mills adjusting prices, stockists and project suppliers may begin securing materials earlier to avoid higher costs later in the season. A more realistic pricing environment, he added, would help stabilise demand, allow mills to operate more consistently, and reduce disruptions caused by cash-flow stress.