Bangladesh, dubbed as an emerging economy that has recorded GDP growth stable at 6-7% for the past decade, has been in the spotlight. Having moved up to a lower middle income group country, Bangladesh has only just begun dipping its toes in the development pool. Infrastructure spending is on the rise in the country, the government is setting up numerous power projects and the hazardous ship breaking industry is withering. The various aspects of the changing scenario of development in the country have collectively shifted the focus on its steel industry. The country’s steel industry is pegged to reach a capacity of 5+ million tonnes (mnt) by 2018, currently at about 3 mnt.

This uprising of the steel industry in Bangladesh was made apparent at the 2nd Coal, Steel & Raw Material Conference – Emerging Markets, organized by SteelMint Events in Dhaka on the 14th & 15th of November 2016. The event hosted over 270 delegates from more than 12 nations. The 2-day international conference attracted participation from varied industries including steelmaking, re-rolling of long & flat products, trading of coal, scrap, steel; equipment supply, technology consulting, end users, local & international associations and others. The sheer number of participation indicates the mark Bangladesh is slowly making on the global steel market.

The conference opened on a high note with discussion on what is being called as the raw material that will paint the future of Bangladesh – ‘Coal’. Currently, the country largely uses natural gas as fuel; however the gradual shift to coal is visible as demand for fuel continues to rise. Coal demand in Bangladesh is expected to increase sharply in coming years amid upcoming coal based power plants in the country. It has already doubled its import last financial year to around 3 mnt from 1.5 mnt in previous financial year. What clearly came out as a highlight in panel discussion on Day I is that Bangladesh needs to build robust logistics infrastructure whether it is bigger & more ports, stronger railway network or even better roads to facilitate huge seaborne trade of more than a few essential commodities.


The rising steel demand in Bangladesh was emphasized on by Mr Aameir Alihussain, Managing Director, BSRM on the second day of the summit. Notably, about 2 million tonnes of new steel capacities will venture into Bangladesh in the next year to fulfill the rising steel demand of the country. Mr VR Sharma, Group CEO, Abul Khair Group outlined the opportunities as well as challenges in store for the country. Mr Manwar Hossain, Managing Director, Anwar Group said that the country’s steel industry will be witnessing a structural change in the next couple of years. While billet import will continue until the new steel melting shops become functional, import of sponge iron and scrap will experience a rise. Bangladesh represents a rich market for scrap import. Quality steelmaking is a point of focus for producers as well as buyers in the country now, which has stimulated reduced supply of billet and rising requirement of scrap & sponge iron. This is slowly also affecting the once flourishing ship breaking industry in the country. That Bangladesh is expected to become the third largest scrap importer in Asia was precisely the point Mr Sanjay Mehta, MTC Group and Mr Zain Nathani, Nathani Group from India stressed upon in their presentations.

Mr R Somnath, Chief Strategy & Business Excellence, Tata Sponge spoke at length about the opportunities for export of sponge iron to Bangladesh. He said that assuming a conservative estimate of 3 mnt steelmaking in the country, requirement of DRI (10% of total feed) would be 330,000 mt, as against an estimated consumption of 140,000 tonnes in FY16. And with steel production rising, Bangladesh will need more DRI and India will be the best fit to supply the material owing to proximity and competitive cost. The sessions also included highly essential discussions on the industry shift to newer and more energy efficient steelmaking technologies whether it is via the induction furnace or electric arc furnace route.

In a nutshell, the Bangladesh government through its multiple development projects is poised to double its current per capita steel consumption of 25kg and the government wants to use steel that is manufactured locally. This transforms in to high growth trajectory for local businesses especially steel, cement, power, logistics sectors of the country. It also means more demand for raw materials, machinery, technologies and other related products & services which the country is dependent on import sources. Clearly, the world is closely watching this emerging economy for its rising imports and also be a part of this growth story.

Source: Steel 360 Magazine Dec’16 Issue