Steelmakers facing cocktails of challenges
Steel manufacturers are actually bracing for massive losses seeing as the coronavirus pandemic features disrupted the import of recycleables and production -- a expansion which will also deal a good blow to property and infrastructure projects.
Just as much as 90 % of the recycleables are imported from the united states, Canada, Italy, the united kingdom and Australia, that have gone into partial or full lockdown because the beginning of March to support the spread of the extremely contagious and deadly pathogen.
And the lockdown in the countries are unlikely to become lifted anytime soon given the breathtaking rate at which the novel virus is infecting persons there and claiming lives.
In the first two weeks of March, the steelmakers' losses amounted to Tk 350 crore, explained Manwar Hossain, president of Bangladesh Steel Mills Owners Association.
If the situation continues on like this for another four a few months, the losses will manage north of Tk 4,000 crore, explained Hossain, also the managing director of Anwar Band of Industries that owns Anwar Ispat.
Not only raw materials, steel manufacturers cannot bring in extra parts or capital machinery for the around standstill of monetary activities all over the world, he explained, adding that about eight million empty containers are actually stranded in the Chinese ports only.
To tide them above during this hoping period, steelmakers are demanding some policy support -- but not funds from the federal government.
Banks can extend the tenure of repayment for letters of credit by yet another six months with no need for taking prior permission from the central lender, Hossain said, even while calling for a good fund for short-term loans against LCs.
The steel industry is currently worth Tk 50,000 crore, based on the sector people.
In the past couple of years the country found a great number of new steel and re-rolling mills that use state-of-the-art technologies and turn out world-class products, stated Md Shahidullah, secretary general of the Bangladesh Steel Manufacturers' Association.
The united states has about 40 active makers, who altogether have the capacity to produce nine million tonnes of steel a year. Of these, Abul Khair Metal, GPH Metal, BSRM and KSRM fulfill over fifty percent the annual demand for about eight million tonnes.
"We have been left in a good pickle as the pandemic offers broken the source chain of all the countries from where we source our recycleables," said Shahidullah, as well the managing director of Metrocem Metal.
Although steel industry isn't export-oriented, the federal government should give it the same importance as the garment sector, he said, adding that today's situation may also affect Bangladesh's real estate sector.
Sales of steel goods declined during the last two months because of a slowdown in building works for some of the big infrastructure jobs of the federal government, while private usage also transpired significantly, Shahidullah added.
The impact of production disruption in the steel industry will never be felt straightaway for the Padma bridge and Karnaphuli river tunnel projects, that have a stock of construction materials, said Jamilur Reza Choudhury, a renowned civil engineer and a former teacher of Bangladesh University of Engineering and Technology.
But the works of other projects just like the Dhaka-Chattogram elevated expressway will be hampered.
"Against the backdrop, the overall implementation of the infrastructure tasks may slow down for the time being," said Choudhury, also a consultant of the government's key infrastructure projects.
The government's infrastructure projects take into account 35-40 % of the total steel consumption in Bangladesh, up from 15 % ten years ago, according to Shahidullah.
The fate of at least 8,000 personnel in Chattogram-based PHP Family's steel mill is hanging by a thread as the factory has been closed because of the lockdown, said Dilshad Ahmed, head of media and pr of PHP Family group that owns the PHP Arabian Horse Super brand.
"Production and sales provides flatlined," he added.
