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Bashundhara will start work in January 2021 on a three-factory steelmaking complex to be located in a new economic zone in Mirsarai, Chattogram, according to a Bangladeshi steelmaker source.
The Chattogram region is home to factories owned by the country’s four largest steelmakers and benefits from close proximity to a large deep-sea port, into which Bangladesh’s bulk scrap cargoes are shipped.
Bashundhara’s plant will feature an electric-arc furnace (EAF) with capacity for around 1.3 million tonnes per year of steel, the source told Fastmarkets.
The group will invest 43.5 billion taka ($504 million) in building the plant, according to local media reports.
Fastmarkets understands that Bashundhara has signed a contract with a major European equipment maker to supply the plant’s machinery, but a source at the equipment maker did not respond to questions from Fastmarkets at the time of publication.
The plant will be designed primarily to produce long steel, but the option of flat steel production will be kept open, according to the mill source.
A South Asian trader said that Bangladesh currently lacks capacity for alloy steel grades, so he would not be surprised to see a plant set up in the near future which has capacity for special steels.
Bashundhara’s big steel splash Although this would be the first step by Bashundhara into large-scale steel production, the group is well established in cement production and steel fabrication, among its 20 major concerns.
The firm has bold ambitions to expand its steel capacity to levels similar to those of Abul Khair and BSRM, which are currently the country’s largest steel producers, a second South Asian trader told Fastmarkets.
Installing the 1.3 million-tpy EAF would instantly put Bashundhara into Bangladesh’s top four largest steelmakers by capacity.
Bangladeshi steelmaker GPH Ispat has in recent months restarted a new EAF in Chattogram after testing the unit at the beginning of the year. That capacity enlargement put GPH Ispat’s total capacity in excess of 1 million tpy.
Bangladeshi steelmaking capacity totaled around 9 million tpy in the first half of 2020. Some industry observers believed that the country’s capacity could rise to more than 20 million tpy over the next decade with the nation continuing to industrialize rapidly.
The Bashundhara plant was likely to take at least two years to complete, but the second South Asian trader said that it could be done quicker depending on requirements.
He drew comparisons with a blast furnace (BF) plant at Alliance Steel in Malaysia, on which construction was started in 2017 and which began production just over a year later.
“It depends on demand. If they need the plant quickly, they will do whatever they can to have it made as soon as possible,” he said.
Scrap demand Bangladesh has become a significant importer of steel scrap in both bulk and containerized shipments in recent years.
Fastmarkets’ latest weekly price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh, was $315-325 per tonne on September 24, down by $4-10 per tonne from $325-329 per tonne a week earlier.
Fastmarkets launched an import price assessment for HMS 1&2 (80:20) scrap on a bulk, deep-sea origin basis in March this year. On September 24, it added new import prices for shredded in bulk, and for both HMS 1&2 (80:20) and shredded in containers, to its pricing coverage.
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