The reopening of the Egyptian billet market remains the hot topic in the steel business as it provides a lot of opportunities to the sellers and for now supports the positive moods in terms of billet pricing in the region. Egypt-based buyers have been actively checking the prices lately for various origins and the offers are within a wide range depending on the seller. As a result, the market is for now inconsistent and still seeks the workable price, although some sources report the deals have been already taking place.
The CIS-based mills are mainly in the market with $640-650/mt FOB offers, which makes $690-700/mt CFR Egypt levels, taking into account $50/mt estimated freight. In the meantime, according to sources, the international traders have been offering $680-685/mt CFR offers for the same origin, but mostly “going short”. Some sources, however, have heard the traders’ deals at as high as $700/mt CFR, closed earlier this week.
In addition, there has been a lot of information discussed in the market regarding ex-Iran cargoes sold to Egypt. According to some sources, a 30,000 mt lot has been traded at $670/mt CFR, while another 40,000 mt cargo has been reportedly sold at $655/mt CFR. “Iran might be active for a while in Egypt since they are finding it hard without China,” a source told SteelOrbis. Ex-India billet cargoes, also being offered to Turkey at the same time, have been priced at $675-680/mt CFR Egypt. In addition, this week an India-based mill has closed a 30,000 mt billet tender at $590/mt FOB and the cargo is said to be destined to Egypt. The freight is estimated at around $70/mt but the CFR price will sure include trader’s margin.
As a result, a lot of negotiations are there in the Egyptian billet market as of today and the prices vary in a rather wide range of $660-710/mt CFR. Taking into account that they receive offers at very different prices and shipment terms, and also origins, Egyptian buyers find it hard to identify the solid workable price levels. Most market players have no doubts more deals are to be coming up. “It is like the whole new market being there right in time to support the sellers and to partly compensate for China impact. But sooner or later the prices will normalize and come to more reasonable market levels. In fact, we might see lower rebar prices in Egypt, which will weigh on billet imports,” a Turkish mill told SteelOrbis.
Currently, the domestic rebar prices in Egypt are at around $820-845/mt (EGP 14,700-15,200/mt) ex-works and also there some arguments regarding the rolling costs in Egypt, which would also be a factor, impacting the workable billet price levels on the import side. Some sources estimate those as minimum $60/mt and at least $20-30/mt higher for the older and smaller mills, SteelOrbis understands.
It is worth mentioning, that before the safeguard duty had been introduced, Egypt was a large import destination for the billet, mainly from the CIS, but from Turkey too. According to the statistics, in 2018-2019 the average monthly import volume reached 150,000-190,000 mt.