Bangladesh’s national budget for FY2020-21 was presented with no major provisions for the steel and manufacturing sectors. There were expectations of an economical push from the government as the country’s manufacturing sectors struggled amid the COVID-19 outbreak.
To ensure expansion and protection of the domestic shipbreaking industry, the government proposed to withdraw the existing duty on the import of vessels. The government also proposed an increase in the existing regulatory duty on the imports of finished products such as cold rolled coils, in the budget announced on Thursday. For the domestic steel industry, a reduction in the duty on the imports of refractory cement is proposed. Also, there is a proposal to increase regulatory duty on imports alloys including Ferro- Manganese, Ferrosilicon, Ferro-Silico-Manganese to help the steel raw materials manufacturing industry.
Ferrous scrap demand
Bangladesh’s steelmakers imported a lot of ferrous scrap in bulk cargoes in March and April, average volumes booked were around 300,000mt a month. These vessels have either arrived in May or will arrive in June, which would maintain the supply and demand balance for another 2-3 months. It is being anticipated that Bangladesh’s bulk ferrous scrap buying activity is less likely to improve till end of this year.
SBMA call to remove duties
After the announcement of budget last week, Steel Building Manufacturers Association (SBMA) in Bangladesh demanded withdrawal of duty-free facility for importing steel finished goods to protect the local manufacturers, Davis Index reported. The association was also in favour of reducing customs duty on imports of prefabricated raw materials used for the production of finished steel . Commercial steel importers pay only 5pc as custom duty (CD) for imports of finished steel products whereas local steel manufacturers have to pay 25pc duty on imports of raw materials, like ferrous scrap and ferro alloys.
SBMA also opposed government’s move to provide duty-free import facilities for finished steel products to some foreign companies with units located in BEZA, power plants and LNG units. The association urged the government to support domestic industry as the local steel manufacturers can produce international standard products with all modern equipment.