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Egypt sets cement price ceiling below market level - Daily News Egypt

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Egypt sets cement price ceiling below market level

CAIRO: Egypt has set the domestic price ceiling for bagged cement bought from the factory at LE 290 ($50.50) per ton, the trade and industry minister said, a level below recent market prices. Analysts said the new ceiling would cut cement company profits but might provide a boost to construction firms. We need to revise …


CAIRO: Egypt has set the domestic price ceiling for bagged cement bought from the factory at LE 290 ($50.50) per ton, the trade and industry minister said, a level below recent market prices. Analysts said the new ceiling would cut cement company profits but might provide a boost to construction firms. We need to revise downward our forecasts for 2006 for all the cement companies. In the first half of the year, they were selling [cement from factories, bagged] for between Le 300 and LE 320, said cement analyst Nematallah Choucri of HC Brokerage. Minister Rachid Mohamed Rachid also said on Wednesday the retail price ceiling would be LE 330 pounds per ton and that the price changes would be implemented in the next few days. He said prices could be revised in the future if conditions change. He also said Egypt would clamp down on non-producers selling cement for export, which currently fetches about $80 a ton. A construction boom in the Middle East, relatively cheap material and energy costs, and lax Egyptian pollution laws compared to the European Union have helped boost exports. Market consolidation in Egypt has led to accusations of anti-competitive price practices, and in July Egypt urged the country s competition watchdog to investigate. The share prices of Egypt s 12 cement companies were mixed by the end of the session. National Cement shares dipped 0.3 percent to LE 34.25, and Sinai Cement fell 4.6 percent to LE 62.02. Torah Portland Cement rose 0.5 percent to LE 148, and Misr Beni Suef Cement was stable at LE 110. Orascom Construction Industries, one of Egypt s more actively traded stocks, was also stable. Rachid said Egypt produced 36 million tons of cement in 2005, of which 7 million were exported. He expected local consumption to increase by 15 percent in 2006. Last month, investment bank EFG-Hermes said it expected Egyptian cement consumption to grow 13 percent in 2006 and 10 percent in 2007, against previous forecasts of 9 percent in both years, because of big projects in the pipeline. Rachid said he was studying proposals to establish nine cement projects with an estimated total production capacity of 18.5 million tons a year. Reuters

Topics: FJP

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