Steel 360 June cover story extension – Increased import tariff on Billet will not hamper the business as USD 20/MT duty is bearable, says a source from Bangladesh.
MOF, Shri Abul Maal Abdul Muhith proposed Bangladesh 2014-2015 Budget on 5 June, 2014 that gave a clear depiction on tariffs. Now, Bangladesh will have an increased import tariff on Billet of BDT 5,000/MT, which haven’t gone through any change from BDT 3,500/MT from a very long time. On Steel 360 recent issue ‘Billets to Bangladesh’, market participants had mixed views on whether tariff rates will be increased this time or it’ll yet remain constant. It is said that this change in import tariff on Billets is meant to protect Steel set ups for which country has invested about BDT 50,000 million. This includes massive investments on Billet manufacturing units by Top Steelmakers of Bangladesh.
Based in Chittagong, AKS, BSRM and KSRM are the three largest producer of Steel in Bangladesh and together they contribute about 80-85% of the total produce. BSRM is about to scale up to 1.5 MnT and KSRM to about 1.2 MnT of Billet manufacturing. These units might be functional by the end of 2014 and hence, there’ll be a high demand of raw material such as Scrap and DRI.
Hikes and Relaxations on other Steel Products
Raw material such as Sponge iron and reduced iron which are required to make Billet has been exempted of duty which might bring about imports of these raw materials in the country. There’s a nominal increased import tariff on ferrous waste and Scrap, re-melting Scrap and Ingot of Iron and Steel to BDT 2,000/MT from BDT 1,500/MT. These products are alternative to Billets. On the other hand, tariff on finish steel and stainless steel declined to 15%.
A source from Bangladesh says, “On international rates, this hike would bring about a nominal difference of USD 20/MT. This should not affect much on imports, as we already satisfactory offers in the range of USD 540-570/MT CFR Chittagong from various countries.”
While on the other hand, the large manufacturers are not very positive with this change as their Billet manufacturing units are yet to start by this year end and till then, they have to bear this additional burden of imports.
BDT = Bangladeshi Taka
1 USD = 77.66 BDT (Spotted on 12 June, 2014)
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