The North African steel sector has also been feeling the impact of the war in the Middle East, which started with the US-Israeli attack on Iran on February 28. Higher oil and gas prices, surging freight rates, as well as rising delivered prices from Asia to the region have had an impact on the positions of the major North African long steel producers. Falling exchange rates of the local currencies are also contributing to the mills’ pricing decisions.
One of the main Algerian mills has increased its domestic rebar and wire rod prices by DZD 1,000/mt, following several months of stability. The supplier’s rebar is now available at DZD 115,000/mt and its wire rod is at DZD 116,000/mt, ex-works. On US dollar basis, both prices have lost $4/mt due to currency fluctuations, to $734/mt and $740/mt ex-works, respectively. Still, the local Algerian longs market remains the highest-priced in North Africa, since it is basically closed for imports and represented mostly by two large producers.
In Egypt, the rebar prices from Ezz Steel are stable for now at EGP 37,200/mt ex-works officially, but, due to the depreciation of the pound, they are $56/mt down from early March levels to $628/mt ex-works. Other producers in the country, medium and small ones, have been selling rebar at EGP 33,000-36,000/mt ex-works, stable on pound basis, but down $52-55/mt in US dollars over the same period to $574-607/mt ex-works depending on the supplier. Considering such a market change, local Egyptian sources are expecting Ezz Steel to put around EGP 1,500/mt ($25/mt) on top of its rebar prices in the coming days, which will make the price situation healthier. Currently, demand is not supportive while stocks in the market are above medium levels. “It is better they sell some of the stocks now and then the rest later when the price increases. But everyone is waiting,” a local source told SteelOrbis.
As regards exports, Egyptian mills have increased the longs offers by around $5-10/mt over the past fortnight to $550-560/mt FOB for rebar and $560-565/mt FOB for wire rod, for April-May shipments.
The domestic billet offers in Egypt have been reported at EGP 31,000/mt or around $525/mt ex-works, stable in the local currency but almost $45/mt down over three weeks in US dollars due to the significant depreciation of the pound. A rise of around EGP 1,500/mt ($25/mt) is expected to be applied along with the anticipated price rise for rebar. However, sources foresee local scrap levels to be maintained at EGP 21,000-23,000/mt depending on the grade or around $400-440/mt according to today’s rate.
Import billet offers in Egypt are nominal and are up $10/mt over the past week to $480-485/mt CFR from Russia/Donbass. The indications for ex-China billet are at $515-520/mt CFR with no interest seen. In fact, this week the Egyptian authorities have released a suggestion to adjust the billet safeguard and have proposed that the material should be subject to decremental duties over the next three years. Duties will start at 13 percent ad valorem on the CIF import value, then decrease to 12 percent and 11 percent in the following two years, respectively, while minimum specific duties will be at EGP 3,412/mt ($58/mt), EGP 3,120/mt ($53/mt) and EGP 2,860/mt ($48/mt). The new plan also includes an annual tariff-free quota of 176,000 mt, while the details are yet to be clarified.
Local longs prices in Algeria include 19 percent VAT, while those in Egypt include 14 percent VAT.
$1 = EGP 52
$1 = DZD 131.7