Written by The Banking Post
Bangladesh’s steel industry is facing one of its toughest periods in recent years, hit by rising energy prices, costly financing, currency depreciation, and sluggish demand from both public and private sectors. Mills are operating far below capacity, with many delaying fresh investments.
Industry insiders say higher gas and electricity tariffs, coupled with slow progress on government projects under the Annual Development Programme and reduced private construction due to high borrowing costs, have squeezed margins. Per-tonne mild steel (MS) rod prices have dropped to Tk 83,500–86,000, down nearly 7 percent from a year earlier.
Bangladesh has around 200 steel mills, including 40 large ones, with an installed capacity of 11–12 million tonnes a year. Yet actual demand has slumped to about 5 million tonnes, nearly 17 percent lower than usual. “Smaller mills may not survive if demand doesn’t recover,” warned one operator.
Despite the current downturn, the sector’s long-term prospects remain strong. Per-capita steel consumption in Bangladesh is just 43–45 kg, compared to 81 kg in India and over 400 kg in developed economies. Industry studies suggest demand could reach 12–14 million tonnes by 2030, fueled by megaprojects, urbanisation, and a growing middle class.
Major players like BSRM, Abul Khair Steel, GPH Ispat, and KSRM dominate the market and are expected to benefit once infrastructure projects and housing demand pick up. For now, the sector is walking a tightrope — but steelmakers remain hopeful the slump will be short-lived.
