Rolling mills in Egypt are currently suffering from low availability of iron billets production locally.
The hiccup in supply has forced factory closures due to their commitment to workers, as well as their bank obligations that require them to fulfil a guarantee of factory operations.
Tarek El-Gioushy, member of the Chamber of Metallurgical Industries at the Federation of Egyptian Industries (FEI), and Chairperson of Al Gioshy Steel, called for urgent intervention by all government agencies and ministries.
El-Gioushy said that the government involvement would help save rolling mills that have been suffering since the issuance of the decision to impose custom duties on iron billet imports.
He demanded that the government reconsider that decision, particularly since the circumstances the decision was based on have since changed. The most important of these changes is the significant increase in global billet prices, from $270 per tonne at the time the decision was made, to the current price of $550 per tonne.
In October 2019, Egypt’s Ministry of Trade and Industry imposed protective duties on Egypt’s imports of billet crude, which will continue until April 2022. This has been put in place at a decreasing rate, starting from 16% on every tonne of billet imported from abroad.
Factories producing billet ore locally give priority to the rolling line needs of their factories, and the supply is only made to rolling mills factories when the demand for rebar shrinks locally, El-Gioushy said.
He further noted, “There is severe arbitrariness by factories that produce billet crude locally towards rolling mills factories because both parties are competing in the final product, which is rebar.”
Moreover, when supplying the metal in small quantities, factories producing billet locally do not satisfy the needs of rolling mills manufacturers in any way, El-Gioushy added. They also require payment in a prepaid system, meanwhile these factories sell rebar to their customers on a credit system.
This means that integrated factories producing billet crude locally intend to harm the interests of rolling mills factories, practices which do not serve the local market which is supposed to be based on free and fair competition.