Egypt’s steel mills call for further gas, electricity price reduction

Tuesday, 15 October 2019 17:20:08 (GMT+3)   |   Istanbul
       

Egypt’s integrated and semi-integrated steel producers are calling for lower energy prices, for natural gas and electricity specifically, in order to reduce their costs and to increase the overall competitiveness.

In particular, the mills stated that the gas price should be at $3.5/million BTU, pointing out that the global prices have indicated significant drop and that the government has to act accordingly. In addition, while earlier the limited gas output in the country was one of the reasons for high pricing, today Egypt has significantly developed its gas fields and has started exporting, mills underline. As SteelOrbis previously reported, around two weeks ago, Egypt’s government reduced the natural gas prices for the steel industry from $7/million BTU to $5.5/million BTU.

Sources assume that if the lower gas tariffs are successfully pushed for, there might be again certain imbalance, this time between the cost of production of DRI-based and scrap-based mills. However, the producers also call for the electricity tariffs reduction, claiming that the prices in Egypt are higher as compared to the competitors in the region.


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