Egypt’s monthly rebar consumption falls to 10-year low in May

Friday, 26 June 2020 15:20:35 (GMT+3)   |   Istanbul
       

Domestic rebar demand in Egypt was severely hit by a combination of negative factors in May this year, resulting in the lowest monthly consumption rate of the past 10 years. According to the released data, in May Egypt consumed only 312,000 mt of rebar, down 35 percent year on year and 31 percent month on month. In April this year, the situation was somewhat better with 452,800 mt of rebar consumed. “The pandemic, the banning of construction licenses except for governmental and mega projects, and challenges with cash flow are among the reasons,” a local producer said. “We are still struggling in June,” he added.

The subdued domestic consumption has a negative impact on mills’ production activities. According to sources, the average utilization rate is estimated at around 40 percent when considering the 1.25 million mt monthly installed capacity. Moreover, if the demand situation does not improve, sources expect the total rebar consumption in 2020, based on the averaged figures for the first five months, to only slightly exceed 6 million mt, whereas in 2018 and 2019 the figure stood at 7.4 million mt. Egypt's total installed rebar capacity is estimated as 15 million mt per year.

The domestic rebar market situation remains unaffected by imports, taking into account the valid 25 percent safeguard duty for rebar of foreign origin. In addition, the government of Egypt has recently imposed an additional 10 percent tax on imported finished steel, thus making the barrier even higher.


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