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Customs should be applied on imported steel: Industry official - Daily News Egypt

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Customs should be applied on imported steel: Industry official

Steel prices expected to remain stable next month

Unchanged prices of raw material next month to stabilize steel prices  (AFP Photo)
Unchanged prices of raw material next month to stabilize steel prices
(AFP Photo)

Customs should be applied on imported steel in order to encourage domestic industries, Mohamed Hanafy, the general manager of the Chamber of Metallurgical Industries told Daily News Egypt.

Hanafy noted that they have a comprehensive database of all steel imports, pointing out that imports have increased notably over the past two month.

“Steel importers do not mind paying such fees as the price of steel is somewhat low in the countries from which they import,” Hanafy added.

The low steel prices in some countries, such as China, are due to the fact that their currencies have deteriorated, Hanafy noted.

Discussing the additional tariff applied on steel imports, Rafiq Al-Dow, Managing Director at Solb Misr Group, pointed out that it “will not influence the price of steel inside the country”.

Minister of Industry Mounir Fakhry Abdel Nour imposed in April protection fees on imported rebar steel, at 8% per tonne, or no less than EGP 408 per tonne.

The decision will last for three years, with the first years’ protection rates amounting to the prior mentioned fees. The following year, they will reach EGP 325 per tonne, and the year after they will stand at EGP 175 per tonne.

The decision came after imposing temporary protection fees on imported steel for 200 days starting in October 2014. The step was taken by the ministry to protect the local industry from a significant increase in steel imports.

Regarding the prices of steel next month, Hanafy expected prices to remain unchanged due to the stability of the prices of imported raw material.

As for the gas shortage, Hanafy said that the shortage affects “large facilities” only, such as Ezz Dekheila Steel Company and Suez Steel.

“When the supply of gas is stopped, it takes bigger facilities a longer time to regain their operational momentum,” Hanafy said.

On gas prices in Egypt, Hanafy noted that prices are significantly high in heavy industries.

“These prices were set when the oil prices amounted to $100 per barrel, however, the barrel’s price now reached $40,” he added, wondering why gas prices have not be reduced in turn.

Al-Dow also indicated that the gas deficiency influences all industries.

“Gas prices in Egypt are two or three times more than those in the  surrounding region,” Al-Dow said, adding that this leads to Egypt losing its competitive advantage.

In July, steel prices saw an EGP 25 to EGP 150 reduction per tonne. Among the companies that reduced their prices are El-Marakby for Steel, which discounted EGP 25 per tonne to reach EGP 4,825, and Medi Steel, which reduced EGP 100 per tonne to reach EGP 4,550. Egypt Steel also decreased their prices by EGP 100 to reach EGP 4,650.

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