The Financial Express

Construction materials' prices show downward trend amid low demand

SAIF UDDIN | Published: February 28, 2020 11:03:13 | Updated: March 01, 2020 17:59:35

Construction materials' prices fall amid low demand

The prices of basic construction materials like steel rod and cement have been maintaining a downward trend in recent times mainly due to low demand, insiders have said.

They also said the declining trend in investment in construction after the government's crackdown against casino and other illegal businesses last year and common people's reluctance to construction on the back of inflated living expenses are responsible for this.

The demand for building materials and its prices usually maintain an upward trend during the dry season or months before and after January, which has proved to be different this year, they added.

Tanim Rahman, a trader at the city's Tanti Bazar area, told the FE that high quality 72-grade steel rod was selling between Tk 55,000 and Tk 61,500 on Tuesday.

"The 72-grade steel rod manufactured by a leading brand was selling for Tk 61,500 which was Tk 69,000 in the middle of last year and Tk 64,500 early October last," said Mr Rahman, proprietor of Dewan Traders.

Rod prices vary depending on different brands and qualities which are known as 40 grade, 60 grade and 72 grade, he explained.

According to the Trading Corporation of Bangladesh (TCB) market monitoring data, the price of 60 grade steel rod ranged between Tk 58,000 and 61,000 on Tuesday which were between Tk 62,000 and Tk 66,000 a year ago.

When contacted, Secretary General of Bangladesh Steel Manufacturers Association (BCMA) Md Shahidullah said both the steel rod and cement sectors have been facing challenges due to weak demand in recent times.

"Both the cement and steelmakers are now facing hardship due to the fragile demand at this time of the year," he said, adding that the supply of the products has disproportionately increased against the demand.

The demand for cement and rod declined by 30 per cent in February comparing to the same period of previous years, he said, adding that raw materials' prices in the international market have been remaining stable.

Per tonne of scrap metal, raw material of steel products, in the international market has been selling at US$300 to $330 for the last several months, said Mr Shahidullah, also first vice president of Bangladesh Cement Manufacturers Association (BCMA).

Per 50-kilogramme cement bag distributed by different brands now cost between Tk 380 and Tk 450, which were Tk 430-Tk 490 in the middle of the last year, Md Sohel Mia, proprietor of Ms Amena Corporation at the city's Zindabahar area, told the FE.

"We are now facing an unusually drastic fall in sales volume, whereas we make a brisk business during the beginning months of every calendar year," he said.

Mr Mia also said the manufacturers fix the prices of the materials based on different points including demand, supply and raw materials' cost.

"Actually, our businesses rely on the sales volume, which is witnessing an unexpected fall," he said.

He told the FE that he believed many development projects in the country were facing setback following the crackdown against casino and some other illegal business owners.

"Even many honest businesses are adopting cautious policy before pumping money into infrastructure development or building houses," he said.

However, brick and sand prices have remained stable for many months.

Osman Gani, a salesperson of brick maker in the city's Gabtoli Balughat, an important hub of brick and sand trading, said brick price has been remaining stable for around a year.

"You can buy a truckload or three thousand bricks for Tk 24,000 including transport cost," he said, adding that transport costs will be added depending on the destination.

Another variety of bricks with same quantity sells at Tk 22,000, he added.

"The brick kiln operation is becoming a loss-making venture as the demand is declining day by day," he said.

High quality brick chips per truck is now selling for Tk 20,000, said Mr Gani, adding that another variety of brick chips cost Tk 15,000 and Tk 17,000.

Sources said select sand per 200 cubic feet or a truckload now costs between Tk 8,000 and Tk 10,000, up from Tk 1,000-TK 1,500 last year.


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