“Imports will not be affected by this hike,” said a source from Bangladesh
The judgment day was due on 5 June, 2014 as MOF- Bangladesh, Shri Abul Maal Abdul Muhith read his speech proposing Budget 2014-2015. He proposed an enhancement on specific duties. As a result, Billet import duty in Bangladesh raised to BDT 5,000/MT i.e. about USD 64.14/MT, from BDT 3,500/MT. That’s a hike of about USD 20/MT. These taxes were unaltered from many years, but with an investment of about BDT 50,000 million on Steel sector, government needed to protect the domestic growth. On recently released June, 2014 Issue of Steel 360 magazine, Billet market in Bangladesh has been discussed in which there were mixed views on new taxes. But now the smoke is clear.
Sponge import Duty Free while Scrap witnessed 5% hike
In addition, there has been an exception on duty on Billet manufacturing raw material such as Sponge iron and reduced iron. It might signal imports of these raw materials in the country. Ferrous waste and Scrap, re-melting Scrap and Ingot of Iron and Steel also surged nominally to BDT 2,000/MT from BDT 1,500/MT. Contrastingly, taxes on finish steel and stainless steel surged down to 15% i.e. a 5% savings.
Our source from one of the largest Steel manufacturing company in Bangladesh says, “The new budget will be effective from 1st July, 2014. In context to the hike in the Billet, it came out to be nominal, we were expecting worse. I believe this increase of about USD 20/MT should not affect much on imports, as we already satisfactory offers in the range of USD 540-570/MT CFR Chittagong.”
About 80-85% of Steel production in Bangladesh takes place through 3 companies i.e. AKS, BSRM and KSRM. 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.
BDT = Bangladeshi Taka
1 USD = 77.63 BDT (Spotted on 6 June, 2014)
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