Egypt hikes local rebar prices again, seeks to cope with another currency drop

Egyptian producers have continued to operate in rather challenging market conditions, taking into account that the trade is very much affected by the constant devaluation of the pound. The steel suppliers have chosen once again to lift their domestic prices, trying to offset the exchange rate drop. However, the latest dip in the pound today, January 11, has greatly reset their efforts. In the meantime, Egyptian mills remain active in their exports, which is the source of the foreign currency for their purchases, although the international competition pushes them to sell at price levels lower than domestic prices.

Late on January 10, local producer Ezz Steel, the largest steel producer in Egypt, announced its new rebar offer for February production at EGP 25,985/mt ex-works, up EGP 2,535/mt since the second half of December. At the moment of the announcement, the US dollar equivalent of the offer was at $823/mt ex-works according to the $1 = EGP 27.68 rate. However, as of today the actual price is at $767/mt ex-works as the rate has dropped to $1 = EGP 29.7. In fact, the lowest traded point almost hit $1 = EGP 32 during January 11.

Most Egyptian producers have also increased their prices and in fact most of them did so before Ezz Steel. The rebar from other producers in Egypt is generally available at EGP 25,550-27,360/mt ($753-808/mt) ex-works according to the $1 = EGP 27.9 rate.

In the export segment, Egypt is now mainly offering at $670-680/mt FOB for wire rod, while the previous deals were closed to several destinations at $650/mt FOB on average. Around two weeks ago, Egypt’s wire rod export offers stood at $620-655/mt FOB depending on the supplier and the destination. The current rebar export prices from Egypt are at around $650-670/mt FOB.

Domestic rebar and wire rod prices in Egypt for February production

The domestic prices in EGP include 14 percent VAT, while the US dollar levels do not. 

$1 = EGP 29.7