Realtors rush rod price hikes, other building materials

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Soaring prices for ms (mild steel) and other building materials have pushed the construction and real estate sector into a slowdown, with its cascading impact on interconnected sectors of the economy, sources say. .

According to them, such volatility will have a long-term impact on the overall economy of Bangladesh, as many other sectors are linked to construction activities in the country.

The millers say the price spiral is mainly happening due to the rising price of scrap metal which is used here as the main ingredient for steel products. The shipping cost has also increased several times from the pre-pandemic level.

The uncertainties related to the Russian-Ukrainian war are dealing the latest blow to construction activities which had already been struggling with the fallout of the pandemic across the world, they add.

Several retail sources in the capital said grade 72 steels – or the finest quality steel products available in the country – were selling for between 90,000 and 95,000 taka per tonne in recent days.

“Even last December, prices ranged between Tk 75,000 and Tk 80,000 depending on the manufacturer,” says Tanim Rahman, a retailer on the city’s north-south route.

According to data available from the Trading Corporation of Bangladesh (TCB), as of March 25, the best quality or grade 60 mild steel wire rod is selling for between Tk 83,500 and Tk 91,500 per ton.

TCB data also reveals that the latest price was about 26% higher than the corresponding period last year and 12% higher than a month ago.

In addition, grade 40 wire rod was selling for between 77,000 and 80,000 taka per ton, almost 20% more than the same period a year ago.

Speaking to the FE, Deputy Director General of Major Manufacturers BSRM Tapan Sengupta said the price of scrap metal was on an upward trajectory amid the pandemic and continued to rise rapidly amid the outbreak of the Russian-Russian war. Ukrainian.

“The Russian-Ukrainian war fueled the flames in the global steel sector which was suffering badly from the mismatch of supply and demand,” he says.

The two countries supply 50 million tonnes of scrap metal and a significant amount of other raw materials used by the steel industry, Sengupta explains.

According to sources, scrap metal per ton in the world market was selling for around $680-700 per ton, depending on various aspects, or $550-600 per ton in December.

When contacted, a director of the Bangladesh Construction Industry Association (BACI), Rezwanul Kabeer, said that the increase in the prices of construction materials had badly affected the sector due to the unpredictable price changes.

“We have problems because the actual prices for construction materials, especially ms rod, are much higher than those estimated for government projects two or three years ago,” he says.

He says that practically construction companies have to count the losses if they continue the projects with the existing prices.

At a press conference last week, BACI executives said that over the past year the price of cement per bag has increased by 22%, stone per cubic foot by 24%, brick by thousand by 22% and the electrical cable reel by 94 percent.

Deputy Chairman of Real Estate and Housing Association of Bangladesh (REHAB), Kamal Mahmud, said the cost of constructing an apartment per square foot has increased by Tk 700 on average due to rising prices for rod and other materials.

There was a 15% increase on average in the prices of all building materials, he said, giving an insight into the crisis situation.

“A real estate agent will have to sell an apartment at Tk7,000 per square foot that has been contracted for Tk5,000,” he says, adding that in the process, middle-income families will struggle to afford their own. apartments.

The government should set up a watchdog to check for any unusual price hikes, he suggests.

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