Pandemic leaves little impact on steel, cement makers
Their profits rise in the second half of 2020
Post-Covid demand for steel and cement was high because of the resumption of construction work in public and private sectors. Star/file
Leading steel, cement and paint companies related to the construction sector witnessed higher profits in the July-December period of the current financial year despite the ongoing coronavirus pandemic.
Although industry insiders fear that they will face 30 per cent lower profits from the July-December period, the reality is different as profits came mainly due to higher demand from government development projects.
Among five listed cement manufacturers, three saw higher profits, one returned to profits and the last incurred a loss albeit on a lower extent compared to that in the same period the previous year.
ধর্মরতি মহাথেরোর শোকসভা অনুষ্ঠিত comillarkagoj.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from comillarkagoj.com Daily Mail and Mail on Sunday newspapers.
Steel sector still in a shakeout
Consumption nosedives amid pandemic; situation will improve
hand in hand with economy, industry insiders say
Steel manufacturers registered around 40 per cent less turnover last year compared to 2019 as they were forced to sell finished products at lower prices in the face of low consumption, according to industry insiders.
The millers even had to offer additional commission for the dealers in order to make sure that they had enough liquidity to survive the ongoing coronavirus pandemic.
During the pre-pandemic period, the production cost of 60 grade MS rod stood at about Tk 58,000 per tonne. But in the April-June quarter, the millers had to sell it at Tk 50,000 to Tk 52,000 per tonne due to low demand, which prevailed until September-October, said Md Shahidullah, secretary general of Bangladesh Steel Manufacturers Association.
Businesses are experiencing an uneven recovery from the pandemic-induced slowdown as larger firms are bouncing back strongly thanks to the easy access to the stimulus packages while the smaller ones are still mired in the crisis.
The large industrial and service sectors have made as much as 80-90 per cent recovery compared to the pre-pandemic level. It is only 30-40 per cent for small and medium enterprises.
Since March, the government has unveiled 21 stimulus packages involving more than Tk 120,000 crore, which is about 4.5 per cent of the GDP of Bangladesh and one of the largest in the world.
Businesses belonging to the large industrial and service sectors have managed loans smoothly, whereas small enterprises have been largely deprived.
Construction set to be costlier as rod prices soar
Steel prices jumped 17 per cent in the last one month as millers hiked the rates in the wake of spiralling scrap prices in the international market, which will make the implementation of public construction projects and home building costlier.
The retail price of 60-grade MS (mild-steel) rod rose to Tk 64,000 per tonne, up from Tk 54,000 a month ago and Tk 61,500 during the corresponding period last year, data from state-run Trading Corporation of Bangladesh showed.
The price of steel scrap increased by $100 per tonne in international markets recently, said Manwar Hossain, president of the Bangladesh Steel Mill Owners Association.