SteelMint has heard from its market sources that Egypt’s major rebar producer, Beshay Steel has increased its rebar prices by EGP 230/MT (USD 13/MT) and subsequently the company’s rebar is being offered at EGP 12,200/MT (USD 692/MT) ex-works.
Another steel major Egyptian Steel has also increased its rebar prices by EGP 200/MT (USD 11/MT) and its prices are being assessed at EGP 12,150/MT (EGP 690/MT) ex-works. While prices of rebar offered by steel producer, EL Marakby has been increased by EGP 150/MT (USD 9/MT) and is now being offered at EGP 12,050/MT (USD 684/MT) ex-works.
Suez Steel (Solb Misr) rebar prices have been increased to EGP 12,175/MT (USD 691/MT) ex-works while Ezz Steel has kept its prices unchanged at EGP 11,970/MT (USD 679/MT). All these domestic rebar prices include VAT of 14%.
The rebar prices in Egypt are on a roll especially since second half of 2017 and both domestic and global factors are responsible for the same.
The domestic factor contributing to increase in Egypt’s rebar prices
In Jun’18, Egypt government announced provisional anti-dumping duty on country’s rebar imports from China, Turkey and Ukraine for a period of four months in order to restrict cheap rebar dumping in the country and to protect the domestic steel industry. This provisional duty was further extended for two months till Nov’17.
However, in late Dec’17, Egypt announced permanent anti-dumping duty on rebar from China, Ukraine, and Turkey. The duty had been set at 29% for rebar from China, 7.0-22.8% for rebar from Turkey, and 17.2-27.0% for rebar from Ukraine.
The anti-dumping tariffs gave Egyptian manufacturers a chance to increase their production capacity in order to fill the gap between supply and demand. The decision to impose the permanent anti-dumping duties was taken following a series of meetings and calls from local manufacturers that were heavily affected by imported steel. According to local reports, many steel units in Egypt halted their operations earlier in 2017 due to the influx of cheap imports.
Along with cheap imports restriction, the domestic rebar prices have increased in Egypt on account of improvement in its domestic demand from the construction sector.
The global reason responsible for Egyptian rebar prices
The global factor that contributed to rise in Egypt rebar’s prices is Chinese government announcement to curb excess supply.
These excess capacity cuts involved closure of induction furnaces in order to control rising pollution levels in the country and promotion of EAF (electric arc furnace). Now, one of the key raw material used in EAF (which produces steel using scrap) is graphite electrode. Thus, with the boost to EAFs in China, the demand for graphite electrode also increased significantly, creating its shortage in the global market.
The impact of graphite electrode shortage globally can be seen on the steel mills in Egypt that are producing steel using scrap via EAF route and alternatively have to use billet (as their feedstock) which is already overpriced in the Egyptian market. Also as per industry sources, production via EAF route is also proving costly to domestic steel mills due to higher scrap prices in the country.
Thus, the shortage of graphite electrode globally coupled with swelled up scrap and billet prices have contributed to increase in Egypt’s rebar prices.
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