Egyptian authorities have finally announced the decision regarding the safeguard case on billet and long steel imports. Ministry of Industry and Trade has disclosed the final rates for billet, rebar and wire rod imports with their gradual reduction within 2019-2022. The validity period starts on October 12 this year with the first rates to be in force for only six months.
The trade restriction will be applied as follows:
|
Product |
October 12, 2019 - April 11, 2020 |
April 12, 2020 - April 11, 2021 |
April 12, 2021 - April 11, 2022 |
|
Square billet |
16% or min. $74/mt |
13% or min. $60/mt |
10% or min. $46/mt |
|
Rebar |
25% or min. $125/mt |
21% or min. $105/mt |
17% or min. $85/mt |
|
Wire rod |
25% or min. $125/mt |
21% or min. $105/mt |
17% or min. $85/mt |
The decision was rather unexpected for the local re-rolling companies, who were hoping that the rates will be reduced to seven, five and three percent over the next three years. Therefore, the results are in favor of the Egypt’s steel producers, who have filed for the safeguard in the first place as they were suffering from high billet production costs versus cheaper imports. “[Scrap-based mills will have] just a comparable position with excessive imports coming to Egypt. In principle no one aimed to stop imports, it’s a matter of having fair conditions in the market for everyone,” a local producer told SteelOrbis.
With the decision announced, the billet imports to Egypt are expected to remain at reduced levels and will largely depend on the local rebar price situation as well as the level of billet offers coming from abroad. In the short run, Egypt’s issue might impact the positions of the CIS billet exporters, who have been trying to pull up their prices recently. “Having this percentage is very bad and I think it will drag the billet market down,” a large trader said.
As for rebar imports it would be safe to say that the Egyptian market is now closed for imports from most destinations, taking into account the antidumping duty rates for Turkish and CIS rebar. Some chance might be there for Saudi Arabia, but the trade will depend on the price trends in both of the markets, SteelOrbis understands. The inflow of wire rod, which has not been significant, will be hardly manageable from now on also.