Ashry Steel, Egyptian rebar, sections and steel tube and pipe producer, recently launched a new rolling line with an annual capacity of 500,000 tonne, and the first batch of rebar was produced on 1 Oct’19. If the trial production is successful, the new rolling line is scheduled to start mass production in the short term. The company plans to produce more than 300,000 tonnes of rebar in 2020.
In February this year, the company had announced the expansion of the plant’s production line during the current year to reach 800,000 tons annually. Ashry Group had agreed with the group Primetals Global for the second establishment of a new plant to be added to the group’s factories for the production of galvanized sheet and cold drawn sheet and the total investments are estimated at USD 100 million.
With the new capacity of rebar coming up, the demand for billet will also increase but the country’s steel participants are in tandem due to decision on import tariffs on billet and rebar is still pending. The Egyptian steel demand and prices have been deteriorating as of now as the market is waiting for definitive tariffs to protect their local billets and rebar industry.
The case so far
In April this year, the country’s Ministry of Trade and Industry had imposed temporary tariffs on the imports of billet and rebar. However, rolling mills appealed this decision to the administrative court on grounds that it was based on erroneous data pertaining to the magnitude of steel billet imports. Subsequently, a court in July ruled in their favor, revoking the ministry’s earlier decision. The ministry then appealed the decision in the same month which was also rejected by the administrative court in favor of rolling mills.
However, the integrated steel makers of the country are forcing the government to introduce tariffs on billet and rebar imports in the name of protecting domestic steel industry from cheap imports. Subsequently, the advisory committee to the minister of trade and industry has come up with two proposals for future safeguards. Under the first proposal, the ministry will impose 7% tariffs on steel billets during the first year, 5% during the second and 3% during the third year.
Under the second proposal, the ministry will impose 15% tariffs during the first year, 13% during the second and 10% during the third year, on steel billets. Meanwhile, there is only one suggested proposal for rebar. The proposal suggests 25% tariffs during the first year, 22% during the second and 19% during the third year. The ministry can chose any of these proposals or impose different tariffs altogether and the decision of the same is expected by 15 October 2019.
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