A major Egyptian HRC producer has adjusted its local prices upward by a significant margin, following a rather long period of stability even after the safeguard against HRC imports was imposed back in September. The market is yet to react to the hike in local prices, but overall the producer’s move is expected to result in the Egyptian market being a little more accessible to HRC imports, even with the safeguard tax of 13.6 percent. In the meantime, while having quite high prices locally, the Egyptian supplier is rather cautious as regards export activities, trading only medium-size lots to nearby countries.
This week, Egypt’s Ezz Steel has announced an EGP 2,000/mt increase for domestic HRC, with its offers now standing at EGP 35,000/mt ex-works, including 14 percent VAT. Based on the exchange rate of $1 = EGP 47, the current offer is at $653/mt ex-works, up $37/mt from the previous level if the same exchange rate is considered. “It has been weeks since the safeguard announcement, so the market has had some time to adjust, but now higher local prices mean there is a somewhat lower obstacle for imports,” a market source told SteelOrbis.
The latest offers from China have been reported at $480-490/mt CFR Egypt, stable over the past two weeks, while there were not many takers since the price with the minimum safeguard of EGP 3,673/mt or $78/mt makes the price $563/mt CFR on average. However, with local HRC offers now exceeding import prices by $90/mt (with the minimum tax included), imports are becoming more possible.
Russia has an even greater chance of sales to Egypt at present since its offer level is the lowest at $465-475/mt CFR or $548/mt CFR on average including the minimum tax. The sanctioned Russian mill, according to sources, has up to 40,000 mt of December production for sale and some of this volume may be directed to Egypt since the supplier traditionally focuses on selling to the MENA region.
Turkey’s mills are currently offering at $530-540/mt FOB or around $545-560/mt CFR Egypt depending on the supplier and the offered volume, which with the minimum tax included equals $613/mt CFR, not leaving much chance for successful sales.
Considering the increased and currently much higher local HRC prices compared to export prices, Egypt is careful regarding overseas activities. Following a couple of weeks of silence, Egyptian offers for January shipment HRC have been evaluated at $535-540/mt FOB, up $5/mt since mid-October. The lower end of the range is reported to have been fixed in sales to Turkey for a total of around 20,000 mt (at $547/mt CFR) and the upper end has been recorded for a sale of around 10,000 mt of HRC to Tunisia, SteelOrbis has heard from the market.
