Bangladesh-based steelmaker GPH Ispat has ramped up steel production post the COVID-19 crisis.GPH Ispat is all geared up to commission its expanded rebar capacity latest by December. More than a half-million tonnes of additional rebar supply is expected to come into the Chattogram market in 2021 to tap rising infrastructure demand in the country. The total investment in this project is reported to be around BDT2,390crore ($281mn).
GPH has already initiated hot trials at its newly constructed melt shop in Chattogram. The production capacity of this melt shop is said to be around 840,000mt per year. Post-expansion, GPH’s long steel capacity will increase by 640,000mt, learnt Davis Index.
The expansion plan was delayed by the COVID-19 outbreak. There were several technical issues along with the non-availability of international experts due to restrictions on international travel. The cold commissioning of its new plant at Sitakunda was completed in mid-January.
The company’s executive director finance Kamrul Islam is confident that the plant will operate at full capacity in December given the recent recovery in domestic steel demand. The company had purchased 8.85acres of land for the expansion project at a cost of around BDT73 crore in 2016.
On reaching 100pc capacity, GPH’s annual production capacity will cross 1mn mt of billets and around 800,000mt of rebar, wire rods and sections. The new plant could increase the company’s ferrous scrap consumption to the level of top steelmakers in the country including BSRM and AKS Steel. Primetals Technologies Austria, a joint venture of Siemens and Mitsubishi Heavy Industries & Partners supplied machinery for this project.
GPH Ispat aims to achieve a turnover of BDT15bn ($1177mn), up from the existing BDT13bn ($153mn). This expansion will also help GPH ensure the supply of quality products and phase-out substandard products.
GHP is actively restocking imported ferrous scrap in containers, said Shahidul Sagar, Director UK and EU region. It is estimated that over 15,000-20,000mt of ferrous scrap has been booked by Bangladeshi steelmakers in the last two weeks in containers. Steelmakers preferred containers instead of bulk bookings. Davis heard deals for #1 HMS from South Africa and Brazil at $313-315/mt cfr Chattogram, shredded from the UK at $325-330/mt cfr Chattogram and HMS 1&2 (80:20) from the UK and the US in the range of $310-320/mt cfr Chattogram.
The steelmaker has held its billet sales offers at BDT41,000-41,500/mt ex-Chattogram and its purchase price for domestic shipbreaking scrap equivalent to P&S at BDT30,000-30,500/mt delivered mill.
Meanwhile, most Bangladeshi mills are focusing on liquidating their inventories at a discount to clear pending dues to utilities and other providers to avoid defaults. These discounted offers are preventing domestic steel prices in Bangladesh from recovering despite steady demand. On Thursday, rebar was offered at BDT54,000-55,000/mt ex-works, at discounted levels from the prior week.