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Falling global iron prices weigh on Egypt’s efforts to support local industry

Falling global iron prices weigh on Egypt’s efforts to support local industry
Egypt impose a 25% import duty on steel rebar

By: Heba El-Kordy

Cairo – Mubasher: The Egyptian government has taken several decisions to support the local steel and iron industry, including cutting prices of natural gas delivered to iron and steel factories to $5.5 per one million British thermal units (BTU).

Following this decision, several companies have slashed its prices, Mohamed Magdi, an analyst at Beltone Financial, said.

However, the declining global prices of iron billets will counteract the positive impact of this decision, he noted, expecting global iron prices to pick up again over the next six months.

In addition, the Egyptian minister of trade and industry decided to impose a 25% import duty on steel rebar and a 16% import duty on iron billets for the next three years.

This decision is also forecast to support several companies, including Ezz Steel, Egyptian Iron and Steel (Hadisolb), and Al Ezz Dekheila Steel – Alexandria, Magdi noted.

About 80% of companies operating in the steel and iron industry will benefit from this move; however, rolling mills will be negatively affected, he remarked. 

Misr National Steel (Ataqa) said in a bourse disclosure that the decision to impose fees on imported iron billets and steel rebar will raise its production costs by 16%.

It is noteworthy that over the last three years, fuel and electricity prices hiked significantly as part of Egypt’s economic reform programme backed by the International Monetary Fund (IMF).