The strong currency fluctuations seen in Egypt’s unofficial currency market have continued to take a toll on the local steel prices and business activity. While the official rate is still hovering at around $1 = EGP 30, the black market rate peaked in the past week at $1 = EGP 72, triggering a rapid price increase in the steel sector. However, later on it rolled back to around $1 = EGP 55 and Ezz Steel, the local steel market leader, decreased its prices in the local currency, though they still remain high on US dollar basis.
The current local longs offers from Ezz Steel are at EGP 49,920/mt or at $796/mt according to the latest rate, while HRC is available at EGP 53,740/mt or $857/mt, all on ex-works basis. As a result, the mill has dropped the EGP prices by EGP 5,360/mt over the past week, but the USD equivalent is still at least $100/mt higher than the previous levels. Therefore, most market players foresee further corrections. “In the market, trading is completely stopped. Sellers are waiting for a rebound as the US dollar problem is not resolved and buyers are watching for further drops,” a trader told SteelOrbis.
As regards exports, however, ex-Egypt longs prices are stable, taking into account the current situation with overseas demand, the Red Sea issue, firm scrap prices and the competition in the region. Ezz Steel is now offering at $600/mt for rebar and $610/mt for wire rod, both for March production and on FOB basis. Market players are also watching the situation in the Turkish market, where a $175/mt safeguard measure on wire rod imports was introduced in January. Some assume it will be hard for Egypt and Malaysia to sell there, although these two origins are still subject to the inward processing regime in Turkey. “Russian exports [to Turkey] will be halted unless Russian mills agree to absorb the $175/mt tax,” a source said. In addition, Russian material is subject to 4.5-5.5 percent export tax, introduced late in the autumn of 2023.
