Egypt: high rebound in rebar consumption in June

Following the significant drop in domestic rebar consumption in May due to COVID-19 restrictions and their consequences, Egypt saw a substantial rebound in June. According to local sources, rebar consumption in Egypt reached 658,000 mt, versus only 312,000 mt in May. This is a result of some projects resuming construction activities and the easing of some restrictions aimed at tackling the coronavirus.

The development supports local rebar producers who have had some challenging months in terms of sales and profitability. The month of July, however, may be somewhat challenging for the mills. “There is a stoppage of building licenses except for governmental and mega projects, as well as the ongoing issues of reconciliation of violations for some existing buildings, which have caused a lull in the activity of private contractors,” a local manufacturer said.

Egypt manufacturer duty

The Egyptian authorities have recently amended the earlier introduced additional 10 percent import tax valid for a wide range of products, including finished steel. The move has resulted in a dispute between the government and end-users, specifically those operating in the flats segment. The duty will have had a significant effect on their costs and profitability. With the recent amendment, it was decided to provide an exemption to manufacturers and fabricators, including re-rollers, pipe-makers, service centers, and home appliances and engineering companies, the official paper indicates. “This range of the exempted buyers will include pretty much all importers in Egypt, even traders with cutting lines would count,” a trader said.

The development will surely speed up first of all hot-rolled coil (HRC) imports to Egypt, which have been stalled for the past couple of weeks. CIS-based and Turkish mills will benefit the most due to their geographical proximity. “It is good that sellers will have another alternative in the region – the CIS other than Turkey and Turkey someplace other than the EU, which is tough now.” a source told SteelOrbis.

The amendment involves not only flat steel but also long steel. However, for rebar and wire rod, no significant effect is expected as the segments are already well protected by 25 percent safeguard duty. Some opportunities, yet, may exist for profile and section importers,

 

Information from SteelOrbis