Egypt : Steel Re-bar Price Hikes Spark Concern in Egyptian Construction Industry

Egypt’s rebar prices that have remained stable for a long time are on a roll especially since the first week of Mar’18. The country’s domestic offers have increased by USD 24 to 41/MT (EGP 475 to 820/MT) in the March itself, subsequently worrying the end-user segment.

Now, as per the market reports, Egypt’s Consumer Protection Agency (CPA) has referred all iron and steel factories operating in the local market to the Egyptian Competition Authority (ECA) over allegedly violating laws by reducing their production capacity without reason.

While the local rebar producers are blaming increasing raw material, billet and scrap prices for surge in rebar prices, the CPA’s head Mr. Atef Yacoub believe that the price hike is unjustified as there is no significant change in cost or input elements in the country’s steel sector that would have made prices to rise so consecutively.

According to him the actual production of iron and steel factories is about 7 MnT annually whereas the companies have the capacity to produce 11 to 12 MnT of output per year. This means that the local producers are deliberately not operating at optimum capacities with an intention to increase the prices.

Although the organization has not received any official complaint against the raising prices but it is constantly following up the trends in the market in an effort to protect the interest of end users segment.

However, a re-roller based in Egypt said, “The increase in raw materials prices internationally was not reflected in Egypt for a long time till this rally started. Also, when the market was having slowdown and prices of rebar were not increasing, the producers were not able to buy billets with the high prices that created a gap in billet supply in the country finally resulting in the current situation.”

Egypt’s current rebar offers

Egypt’s Beshay Steel is currently offering its rebar at EGP 12,996/MT (USD 738/MT) ex-works whereas Ezz Steel is offering the same at EGP 12,790/MT (USD 727/MT).

Egyptian Steel and El Gioshy’s rebar prices are being heard at EGP 12,850/MT (USD 730/MT) ex-works. The last offers of Suez Steel (Solb Misr) were heard at EGP 12,400/MT (USD 704/MT), EL Ola at EGP 12,300/MT (USD 699/MT), and El Marakby at 12,050/MT (USD 684/MT) ex-works basis.

All domestic prices include VAT of 14%.