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The price of aluminium products in the domestic markets has increased abnormally in the last couple of weeks due to the rising cost of raw materials at the international level, according to industry insiders.
Due to the impact of Russia’s invasion of Ukraine, the price of construction-grade aluminium has increased 30 per cent at the manufacturing level and 27 per cent at the retail level, sources said.
“In the last couple of weeks, raw material prices increased in two phases in the domestic market. This is mainly because the price of aluminium ingots increased to $4,100 per tonne from $2,900 per tonne in the international market,” said Ashim Kumar Barua, company secretary of Bangladesh Thai Aluminum Ltd.
According to him, the global price of raw materials depends on the London Metal Exchange rate as the price increased abnormally in a two-week span due to the impact of Russia’s invasion of Ukraine.
Raw material prices increased to $2,900 in September last year from $1,670 in 2020, and remained stable for around five months.
However, the price increased just after Russia initiated its war on Ukraine.
“We had to open a letter of credit to import aluminium ingots at $4,100 per tonne yesterday,” Barua said.
Besides, global shipping costs have also risen and its impact has fallen on local prices, he added.
Abdul Mannan, general manager of sales and marketing at Neo Aluminium, said the price of construction grade aluminium rose to Tk 585,000 per tonne in around a week while it was Tk 450,000 per tonne on February 28.
Construction grade aluminium sold for Tk 340,000 per tonne in December 2020, he added.
Mannan went on to say that the price hike came as commercial adjustments to the rising cost of raw materials.
Bangladesh needs about 5,000 tonnes of finished construction grade aluminium each month while the sector as a whole imports around 3,000 ingots per month, he said.
There are 11 companies in the country that manufacture construction grade aluminium for local consumption, he added.
Mannan also said there is no scope to control the market at the moment amid the global turmoil surrounding Russia and Ukraine.
Bangladesh imports aluminium ingots from India, Singapore, Malaysia, Bahrain, Saudi Arabia, and Australia.
After speaking with a number of retail outlets for construction grade aluminium, this correspondent found that prices had risen by around 27 per cent in the last eight days as manufactures increased it by 17 per cent on March 1, and later 10 per cent on March 8.
Mohamad Iqbal Hossen, a retailer in Dhaka’s Farmgate, said manufacturers increased the price through a notice to retailers.
He said the retailers and consumers will be affected by the abnormal price hike of construction grade aluminium as sales may decrease.
As per the current prices, the annual market size for aluminium products has reached around Tk 3,000 crore while it was Tk 2,700 crore just a couple of weeks ago.
(TDS)
