Bangladesh’s GPH Ispat has signed a contract with a Chinese company to export 25,000mt MS billets for $10.17mn. The equivalent market price of the deal is around $407/mt fob Chattogram or BDT35,000/mt ex-works, which is significantly lower than the current billet prices of BDT40,000-41,000/mt ex-works Chattogram. The company disclosed the deal on Dhaka Stock Exchange (DSE) on Tuesday.
More deals expected
The deal is the first-ever bulk billet export from Bangladesh and the shipment is scheduled for the first week of November. It is also the largest volume-based export order secured by a Bangladeshi steelmaker.
Almas Shimul, GPH Ispat’s additional managing director said that if steel producers receive adequate policy support from the Bangladeshi government, this deal will be a new start for the country’s steel industry in terms of value creation. A new stream of revenue can be achieved from the export markets, he added.
Recently, GPH Ispat expanded its annual production capacity to above 1mn mt post the commencement of production from a newly installed electric arc furnace. The company has expanded its billet production to 1mn mt in 2020 from 0.21mn mt in 2018. Its rod production capacity rose to 0.76mn mt in 2020 from 0.15mn mt in 2018.
GPH Ispat is one of the leading steelmakers among 35 mills who produce billets by importing ferrous scrap. Bangladesh’s steel sector has the combined capacity to produce more than 6mn mt of billet annually to make rods and other steel products and 0.55mn mt of high-quality rods. GPH is the third biggest manufacturer of billet after AKS and BSRM in terms of capacity in Bangladesh. The company aims to achieve exports of $70-100mn in the current fiscal year.