Sunday, 4 June, 2023

Soaring Raw Material Cost

Cement price may exceed Tk 500 per bag

  • Staff Correspondent
  • 9 March, 2022 12:00 AM
  • Print news

The country’s cement production has been hard hit by an increase in the prices of raw materials in the international market, causing a hike in the production cost by Tk 50-60 per bag.

While the wholesalers and retailers are charging Tk 20 more per bag, cement manufacturers are in a fix to adjust the prices.

Manufacturers apprehended that price of cement may exceed Tk 500 per bag due to an increase in the prices of raw materials and cost for transportation.

The war between Russia and Ukraine has seriously affected the international market, especially the prices of the crude, bunker and other fuels and industrial raw materials.  Shipping cost has jumped due to an increase in marine fuel price by 50 per cent.

It has been learnt that shipping fare has doubled due to fuel price hikes.

Five raw materials- clinker, limestone, slag, fly ash and gypsum- are used for the production of cerement. Bangladesh has to import all of these raw materials. Of the raw materials used for cement, 62-90 percent is clinker. In the international market, price of clinker has shot up from $60 to $75-79 per ton. Besides, the prices of limestone, slag, fly ash and gypsum have increased by $10-12 per tonne.

After a hiatus caused by the Covid-19 pandemic, Bangladesh and other parts of the world have seriously returned to construction work, creating demand for raw materials. Raw material crisis together with fuel and shipping fare increase has impacted the country’s cement market.

A visit to various markets in the capital on Monday suggested that price of cement of various brands jumped by Tk 20 per bag. Shah Special and Supercrete cement was selling at Tk 440 instead of Tk 420 per bag, Scan cement at Tk 470 instead of Tk 450, Bengal at Tk 430 instead of Tk 410, and Mir cement was selling at Tk 425 instead of Tk 405.

Shamim Hawlader, manager of M/s Helmi Enterprise at Kuril area in the capital, said the market of construction materials is unstable.  He said the cement price has soared by Tk 20 per bag, apprehending a further hike in the days to come.

According to international data, clinker price had jumped by $4 to $46 per ton in February last year. Now, it has shot up from $60 to $75-$79 per ton. Cement price in the local market is likely to increase again due to the growing trend of the price of clinker.

Wishing anonymity, an officer of a leading cement company said “The cement manufacturers are counting loss due to hike in ship fare and price of raw materials. The entrepreneurs are slugging to survive. If the price of cement is not adjusted, the companies will go extinct.”

Md Shahidullah, vice-president of Bangladesh Cement Manufacturers Association (BCMA), expressed concern over the continuous rise in raw material price and ship fare. “If the Russia-Ukraine war continues, the cement and steel industries will become more vulnerable to shocks. Prices of the raw materials from those countries have already doubled alongside a rise in shipping cost.”