October 07, 2008

Bhutanese builders facing slowdown due to high steel prices

It is reported that the rising prices of rebars are beginning to effect builders in the construction industry of Bhutan resulting in a slow down in activities. The report cited Mr Tshewang Dorji a contractor in Thimphu as saying that market prices of TMT bars, nails and screws have shot up by 25%, delaying ongoing construction work.

As per report, prices of iron and steel had risen by 47.5% since October 2007. This is being fuelled, in addition to external factors like international price levels and cost pressures due to high raw material costs by the fact that the average demand for steel in Bhutan has gone up by 14%, whereas the production had increased by only 5% annually.

Some of steel makers and rerollers in Bhutan, located at Pasakha said that "With prices of input materials increased, industries under pressure have no choice but to increase the prices of their products."

Ms Sonam Dechen an official of Bhutan Concast said that "Rise in price of metals is a global trend with markets being volatile."

Of the 4 iron and steel industries in Pasakha, the Bhutan Concast Private Limited, which started production recently, has a total capacity of 5,000 tonnes of steel billets per month. The other 3 together produce 2,500 tonnes a month.