Iron rod and steel are set to be available at lower price from next month, as the industry insiders are expecting increased supply of scrap vessels at a reduced price following the lifting of the import ban on old ships.
"Price of iron rod may come to a tolerant level as we expect to supply more raw materials to our steel re-rolling mills. We will break more ships this year following the Supreme Court verdict in April this year," Hefajetur Rahman, president of Shipbreaker's Association of Bangladesh, told the FE Friday.
Present price of per tonne 60-grade rod ranges from Tk 60,000 to Tk 62,000 and 40-grade rod between Tk 55,000 and Tk 58,000.
Mr Hefajetur Rahman also said the price of raw material of the steel mills will decline as the importers will get old vessels at a lower price in international market.
"Price of per tonne iron scrap will be $ 500 this year, down from $ 515 last year," he added.
He expects to scrap 3 million tones of deadweight this year, up from 2.2 million tonne in 2010.
"60 shipbreaking yards out of a total 112 have got environment clearance which has enabled them to import old ships. Already 55 ships have entered the country since the lifting of the ban while another 12 are in pipeline," said Mr Hefajetur Rahman.
Shipbreaking industry mainly produces ship plates used in re-rolling mills that in turn produce iron bars, necessary for the construction of buildings.
But a section of industry stakeholders are of the view that though the ban was not there to import old ships, problems were still there with getting cutting permission of these ships, which would hamper steel production and raise price.
"I don't think breaking of more ships will be that much effective in reducing iron rod price. Also the shipbreakers are not very sincere in getting cutting permission which I think is because of their bad intention to create a crisis to increase the raw material price," said Masudul Haque Masud, chairman of Bangladesh Auto Re-Rolling and Steel Mills Association.
He said the price of iron rod will come down following the decline in overall development works and a kind of economic recession prevailing in the country.
"I think the price may decline as there is economic recession. Countrywide development projects of the government have not yet started. Except for a few flyovers the construction works of the housing sector are at a halt. So there is hardly any demand of iron," Mr Masud, also managing director of Shahriar Steel Mills at Jatrabari, added.
Recently Bangladesh Supreme Court gave a verdict that lifted ban on shipbreaking industry.
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The country's apex court lifted the ban this year on the condition that industry would take strict measures to protect workers including fixing of age limit at above 18, training and proper safety gears and cleansing of toxic material from ships prior to arrival.
"We have started our own training centres for our workers. Also we are providing them with boots, handgloves, opticals for their safety," said Mr. Hefajetur Rahman.
Source: The Financial Express. By Kamrun Nahar. 4 June 2011
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