Following the recent decision of the Central Bank of Egypt (CEB) to float the local currency, the exchange rate of the Egyptian pound has fallen from around $1 = EGP 19 to over $1 = EGP 24 as of today, November 1. In this situation, the largest local rebar producer Ezz Steel has decided to increase its domestic rebar price by EGP 1,980/mt in order to at least partially offset the currency fluctuation. However, the US dollar-based offer has decreased significantly, signaling that the price increase in the local currency has not been sufficient.
The new Ezz Steel local rebar price has been set at EGP 19,650/mt ex-works, up from the previous EGP 17,670/mt ex-works. In the dollar equivalent, the offer has been set at $712/mt ex-works according to the latest exchange rate, versus $816/mt ex-works as per last week’s average exchange rate. “Most probably prices will rise further as this level is not quite matching production costs. But for locals to pay this [price in EGP] will be tough,” an Egyptian producer told SteelOrbis.
According to sources, Suez Steel has announced EGP 19,550/mt ($709/mt) ex-works, while Beshay is currently offering at EGP 19,600/mt ($710/mt) ex-works, local sources report.
The domestic prices in EGP include 14 percent VAT, while the US dollar levels do not.