SteelMint has heard from its market sources that Egypt’s imported billet offers from CIS countries have increased by USD 5 -10/MT this week and is being offered at USD 550-560/MT CFR basis.
“There were some deals at around USD 550/MT CFR for small quantities but no so much buying taking place,” said a re-roller based in Egypt.
The buying interest at these prices is quite low in the domestic market and this is because of two factors which are moderate domestic demand and buyers’ anticipation of price fall amid recently announced U.S. import tariffs of 25% under Section 232.
The billet and rebar prices in the country have been increasing over past few weeks due to rising raw material, especially scrap prices internationally.
Reasons for rising billet prices and future outlook
In 2017, after China announced production cuts of outdated steel capacities and promoted the development of EAF (electric arc furnace) as a pollution control measure, the domestic demand for scrap (a key feedstock for EAFs) increased significantly in China. Subsequently, its supply (in the form exports) in the global market became quite restricted. As China is one of the key exporters of ferrous scrap in the world, this supply curb led to increase in its prices globally.
This supply restriction from China alone was not enough that now the countries have to brace themselves for higher scrap prices after U.S.’s announcement of import tariffs. This is because U.S. is a major scrap exporter in the world and after the import restrictions in place, the U.S. domestic demand for steel will increase boosting ferrous scrap consumption in the country.
The combined effect of Chinese and U.S. scrap supply curbs is likely to increase its prices in the global market and consequently billet and rebar prices in the upcoming months.
Egypt had a billet production of around 6 MnT and imports of around 2.6 MnT in 2017. The biggest billet producer in the country is Ezz Steel and also includes Beshay Steel, Solb Misr, El Marakby, and Egyptian Steel.
Leave a Reply