Bangladesh: All Steelmakers Suspend Melting Production Amid Covid-19

From the previous few weeks, Bangladesh steel mills had been cutting down their steel production levels due to the covid-19 outbreak induced social distancing policies impacting the steel demand, as well as growing issues of labor and raw material availability.

Now it has been learnt from reliable sources that almost all steelmakers in the country have shut down their steel-making production including the top steelmakers in the country such as BSRM, AKS, KSRM and GPH Ispat, with only dispatches from warehouses happening as of yesterday.

Apart from the shortage of workforce availability of both technical personnel as well as ground labor due to covid-19 fear, another factor which coerced the steelmakers to shut down was shortage of refractory for furnaces, without which the steelmakers could not run for long, while availability of other imported raw materials were also getting impacted. Even as some of the larger mills had earlier obtained necessary permissions, they later decided against continuing the production. No prevailing steel demand also contributed to the decision.

In Bangladesh, Dhaka and nearby Narayanganj area have been the worst affected due to the covid-19 pandemic, and these regions house majority of steel mills in the country all of which have suspended their melting furnaces, while some mills in Chittagong are only operating their rolling mill for the time being.

Sources mentioned that once the lock-down is lifted and construction starts again, there will be a surge in demand for steel rod and bars, and mills look to have optimal inventories for the same, although without creating an oversupply situation in the market.

Some of the major mills in Bangladesh that have suspended their steel melting operations include -

Fig in MT

Source: SteelMint

*company commissioned its new Quantum EAF in Jan'20 but production was yet to be scaled up to full scale before suspending operations.