Egypt's Ezz Steel Cut Down its Rebar Prices by EGP 262/MT W-o-W

SteelMint has reported that the rebar prices in Egypt till yesterday have remained unchanged against last week. However, today Egypt's major rebar producer Ezz Steel announced a cut down in its rebar prices by EGP 262/MT (USD 15/MT) and is currently offering it at EGP 12,528/MT (USD 708/MT) ex-works, including VAT of 14%.

As Ezz Steel is the largest independent steel producer in MENA (Middle East and North Africa) region, it usually drives rebar prices in Egypt. Subsequently, other manufacturers in the country like Suez Steel and El Garhy have also trimmed their rebar offers and are offering the same at EGP 12,475/MT (USD 705/MT) and EGP 12,450 (USD 704/MT) respectively on ex-works basis.

Although there are no updates on price cuts from Beshay Steel and El Marakby, chances are very high that both the companies will also curtail their rebar prices following the trend.

"The gap is very close now between El Marakby's and Ezz Steel price. Others have also dropped their rebar prices below what Ezz Steel is offering. Thus there is no way Beshay and El Marakby can escape this downtrend in prices", said a local re-roller based in Egypt.

Last week, no other company except El Marakby had cut down its rebar prices. The company had announced a price cut of EGP 150/MT (USD 8/MT) and was offering the same at EGP 12,500/MT (USD 707/MT), ex-works, including VAT.

Why are rebar prices falling in Egypt?

The key reasons for the fall in Egypt's rebar offers can be attributed to the plunge in its input costs, (billet and scrap price) globally and the tepid domestic demand from the country's construction sector.

Egypt is majorly dependent upon imports to meet its scrap and billet requirement. The international price market for both the products was positive until the first week of Mar'18 when the U.S. government announced steep tariffs on steel and aluminum imports following which prices of steel and its raw material plunged down. While scrap prices globally have observed an average fall of 4.3% in past one month, billet prices went down by 2.25%.

When the input costs were high, Egypt's producers have increased their rebar offers whereas with fall in raw material costs rebar prices are also moving down in the country. This shows that amid slow demand, rebar prices in Egypt are majorly being driven by the input costs.