Steel industry falls victim to virus

The coronavirus pandemic has badly hit the country’s steel industry with steel and iron production stopped due to a shortfall of raw materials mainly imported from China.

Different associations related to the industry estimated that in the first six months of this year, the industry is going to incur a loss of Tk 20000 crore.

Bangladesh Steel Manufacturers Association (BSMA), Steel Building Manufacturers Association of Bangladesh (SBMAB), and Steel Importers and Traders Association (SITA) have expressed fears about such losses.

According to BSMA, in just two months (March-April), the steel industry in Bangladesh could lose about Tk 3,000 crore.
The BSMA in a recent statement said, “Steel is an industry with high investment, high working capital, high cost. If production is stopped even for a day, the loss is equal to the profit of a month. In the present situation, the industry could incur a possible loss of Tk 3000 crore in the two months of March and April. Unfortunately, even if the situation improves after May, it will take a long time to return to normal operation of the industry”.

BSMA information showed, due to operating cost till June, the industry could suffer a loss of Tk 15000 crore, SBMAB estimated that net loss will stand at Tk 400 crore while the loss of linkage industry will stand at Tk 100 crore.

According to SBMAB, 95 percent of raw materials are imported from China. Since the outbreak of the lethal virus in January, importers are continuously facing various difficulties.

The world's steel scrap supply system has completely collapsed. This raw material, which depends on summer collection, is not going to be collected this year. Traders fear it will have an impact until next June.

Businessmen said three lakh people are engaged in the industry. Due to the stalemate, they are struggling to pay their electricity and gas bills as well as salaries and allowances. To overcome this crisis, traders want a share of the announced incentives, including interest waivers on bank loans.

The country has a demand for 75 to 80 lakh tonnes of steel every year. The Rod Manufacturers and Traders Association said the sector will suffer huge losses if the right steps are not taken.