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TMCNet: 300 STEEL RE-ROLLING MILLS IN BANGLADESH FACE CLOSURE

[April 05, 2009]

300 STEEL RE-ROLLING MILLS IN BANGLADESH FACE CLOSURE

NARAYANGANJ, Apr 06, 2009 (AsiaPulse via COMTEX) -- About 300 steel re-rolling mills in Bangladesh are on the verge of closure due to scarcity of raw materials.

Although price of steel scraps is declining in the international market because of global recession, price of MS Rod has been rising in the country due to shortage of scraps.

The shortage of scraps, the main raw material for the re-rolling mills, has been created for various reasons including scarcity of oxygen used in ship breaking yards.

General Secretary of Bangladesh Re-rolling Mills Association Abu Bakar Siddique said if the problems are not resolved soon re-rolling mills of Narayanganj, Rupganj, Shyampur, Savar, Manikganj, Gazipur and Chittagong might have to be closed down.

Such massive closure of the re-rolling mills, he said, would cause unemployment of up to one crore.

Siddique said ship-breaking yards are the key suppliers of scraps but recently the High Court has directed the government to stop operation of all ship-breaking yards, which run without environmental clearance.

As per the HC order, he said, no ship-breaking operation will take place from now on without environmental clearance and supply of scrap would become uncertain if ship breakers do not get the clearance.

Steel re-rolling mills produce mild steel (MS) Rod used mainly in the construction industry to re-enforce concrete.

Mill owners said price of MM Rod would increase more for the short supply of scrap.

At present, per ton of scrap is selling at Tk 33,00-35,000 (US$48.25-US$51.17) and MS Rod at Tk 45,000-48,000.

Vice-president of Bangladesh Ship Breakers Association M Mohsin said he is not aware of any government ban on ship breaking, but he acknowledged that scrap supply is quite insufficient to meet the demand.

He said scarcity of oxygen in the ship-breaking yards as well as power and gas crisis have been hampering ship-breaking work, which resulted in short supply of scraps.

(UNB)

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