Demand for key construction materials, including MS rod and cement, has weakened sharply amid Bangladesh's sluggish economy, leaving manufacturers operating far below capacity and forcing many to cut prices despite mounting losses, industry stakeholders say.
They said the country's economic slowdown has curtailed both government infrastructure spending and private real estate development, prolonging the downturn in the construction sector and reflecting broader economic weakness.
Speaking to The Financial Express, Tanim Dewan, a steel trader in Dhaka's English Road area, said the local steel market was experiencing a severe demand slump, prompting mills to lower prices.
"Since the political changes last August and the absence of new large-scale government projects, demand has fallen to rock bottom. People simply do not have the money to invest in construction right now," he said.
Tanim pointed to a significant gap between mill-gate prices and retail prices.
"Many dealers are stuck with old inventories purchased at much higher wholesale prices," he said.
"If we immediately reduce retail prices to match current mill rates, we will incur substantial losses," he added, noting that the ongoing monsoon season has further dampened private construction activity.
Millers, however, have continued lowering prices as a survival strategy despite selling at a loss.
Echoing the concerns, former Bangladesh Steel Manufacturers Association (BSMA) chairman Sk. Masadul Alam Masud said the industry was facing an existential crisis.
"We are being forced to operate at significant losses simply to survive," he said.
Masud attributed the prolonged downturn to a combination of factors, beginning with the Russia-Ukraine war, which triggered a severe US dollar shortage and sharply reduced working capital.
"Now, government development work has virtually come to a halt. While payments for projects completed up to June have been cleared, no new work has started," he said.
He added that industries have also been hit by an acute gas shortage over the past 10 days, severely disrupting production. Combined with recent increases in electricity tariffs and VAT, the situation has become increasingly difficult.
Warning of the wider economic consequences, Masud said that between 10 and 20 companies had already shut down permanently because of the prolonged slowdown.
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