SteelMint has heard from its market sources that Saudi Arabia’s steel giant Hadeed SABIC has registered itself with Egypt’s General Import and Export Organization (GOIEC) in order to start the rebar exports to the country (Egypt).
The foreign factories/producers of certain types of goods wishing to export goods into Egypt are required to compulsorily register themselves with the GOIEC. These goods include steel, household electric appliances, milk and dough products, home and office furniture, textiles etc.
SABIC which is a global leader in diversified chemicals and is headquartered in Riyadh has an affiliate Hadeed SABIC which is country’s first fully-integrated iron and steel manufacturer in Saudi Arabia. The company has long products rolling mill with a capacity of 4 MnT and flat product rolling mill with a capacity of 2 MnT adding up company’s total capacity to 6 MnT per annum.
Saudi Arabia which was once dependent upon imports to meet its rebar requirements has now become self-sufficient, with its imports falling rapidly from 2017 and becoming almost non-existent in 2018. This is because country’s local demand for rebar has been badly hampered by a slowdown in domestic construction sector resulting from lower oil prices since 2014. Subsequently, the local rebar facility in Saudi Arabia has become sufficient to meet the country’s declining demand and this is one of the key reasons that nations’ domestic players including Hadeed SABIC have started opting for billet and rebar exports.
Increased competition for domestic rebar producers in Egypt
When the Chinese steel products were flooding the global market, the domestic steel prices in the majority of countries were impacted negatively and this also included the rebar prices in Egypt. Thus with an intention to protect the domestic steel industry, Egypt government announced the imposition of a permanent anti-dumping duty on rebar imports from China, Ukraine, and Turkey with effect from Dec’17.
This gave ample opportunity to the local rebar producers in Egypt to cater to country’s domestic demand and also increase their rebar prices. In a time span of just one month from Mar to Apr’18 the country’s rebar prices surged by 8 – 10%.
However, due to the ongoing holy month of Ramadan, the country’s demand has become quite subdued resulting in stable rebar prices. The market sources are of the opinion that with the end of Ramadan, the demand for rebar in Egypt will pick up once again and if imported billet (raw material for rebar) prices increase, the rebar prices may also surge in the upcoming months.
Now, with no anti-duty on steel imports from Saudi Arabia, Hadeed SABIC entering the Egypt market will result in increased competition in rebar market and the local producers that were enjoying the freedom to govern the domestic prices will have to fix the rebar prices by taking into account the offers from their international counterpart.
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