Egypt Suspends Provisional Safeguards on Rebar and Billet announced in Apr'19

The Egyptian administrative court has suspended the implementation of safeguard measures on steel billet and rebar imports, paving the way for re-rollers to resume overseas purchases. The country had imposed provisional safeguard duties up to 15% on billet and 25% on rebar imports in April this year.

The proposed measure was applied for 180 days and was designed as a remedy to the increase in imports arising from trade measures elsewhere - most notably in the US and EU. Egyptian mills' market share declined by 6% over the first half of 2018 compared to the same period of 2017, and by 10% over the second half of 2018 compared to the first six months of 2017.

However, re-rollers that were dependent on imported billet had been objecting to the decision from the start. As per the market participants, several of the larger re-rollers ceased functioning as billet imports virtually came to a halt. However, integrated steelmakers that manufacture their own billet were in favour of the safeguard measures and could appeal the decision, pending further study by the board of state commissioners.

Despite the safeguard measures, re-rollers in Egypt have continued to import material from Turkey and the CIS during the last two months, even though at very low volumes, and are now expected to re-enter the international billet markets, supporting prices for the semi-finished product, some sources said. Egypt imposed definitive anti-dumping duties on rebar imports from China, Ukraine, and Turkey in December 2017 but it saw an increase in billet imports from Turkish mills which prompted the government to impose safeguard measures.

Adversely impacted by imports, Egypt's Ezz Steel one of the biggest steel producers in the MENA region has reported a wider YoY loss in first quarter standalone earnings for 2019. The company's Q1 (Jan-Mar) 2019 standalone net loss after tax amounted to 369 million Egyptian pounds as compared to a net loss of 187 million pounds for Q1 2018. Ezz Steel's standalone sales stood at 2 billion pounds in Q1 2019, a 3.63% increase compared to the 1.93 billion pounds recorded in Q1 2018.