The increased flow of cheap rebar imports into Egypt has led local Egyptian producers to call for protective measures against imported steel. The Metallic Industries Association in Egypt has submitted an official memorandum to the Ministry of Industry and Trade asking for the imposition of preventive duties on imported steel.
Egyptian producers have this week reduced their rebars prices for the second time in the current month. The reduction is a consequence of the decline of input costs in the iron and steel industry worldwide, according to Ezz Steel, the country's dominant steelmaker. However, the reduction is also due to the impact of the huge competition in the domestic market created by low prices of steel imports from a number of countries. Turkey is the most prominent of the countries in question with its rebars prices to the Egyptian market down to EGP 2,900/mt ($515/mt).
Egyptian steel companies this week cut their prices by between EGP 300/mt ($53/mt) and EGP 550/mt ($98/mt). Ezz Steel lowered its ex-factory price to EGP 3,050/mt ($542/mt) from EGP 3,400/mt ($604/mt), while Beshay Steel, a smaller producer, cut its ex-factory price to EGP 3,000/mt ($533/mt) from EGP 3,500/mt ($622/mt).
Mr. Ismail Sadek, analyst at investment bank Beltone Financial, commented "Imports into Egypt are still a threat to Egyptian producers. Ezz (Ezz Steel chairman Ahmad Ezz) wants to counter the threat posed by the price differential. He has no choice but to lower prices. We are having a reactive response rather than a proactive one."
However, Mr. Sadek is not hopeful that the government will impose any new tariffs. He explained, "You have to have a very strong dumping case. Dumping by definition is when you sell in the export market at a lower price than in your local market."
On the other hand, Suez Steel has announced the stoppage of its billet producing mill since the first week of March 2009. The producer cited losses incurred due to reduced import rebar prices in the Egyptian market as the reason for the stoppage.