Local factories and companies have begun exporting iron to Arab countries, primarily Libya and Sudan, after a three-year halt.
Beshay Steel and Red Sea Steel will supply iron to some Arab countries at prices lower than local prices as a strategy to counter the recession.
Steel factories had ceased exporting iron in 2007 as Egypt’s market was absorbing all the products from local factories. Beginning last year, Egypt began importing iron at a net worth of LE3 million, which prompted local steel companies to demand a halt in iron imports, and call for protective measures against Turkish iron imports in particular. That request was turned down by the Ministry of Trade and Industry.
According to Mohamed Hanafi, head of the metal industries department at the Federation of Egyptian Industries, iron companies are working on exporting their products to Arab countries, especially since no customs or fees are imposed on Egyptian iron products, making them competitive with Turkish and Ukrainian exporters.
Hanafi added that deteriorating conditions in the local market have forced factories to export their stock at prices lower than those officially declared. Some small factories have shut down and others may soon follow due to the recession and competition with Turkish imports.
Hanafi also revealed that his department has submitted an urgent request to the minister of trade and industry to save the local iron industry. He further added that consumption during the first half of this year is much lower than consumption in the same period last year. He further projected that local consumption will not exceed 6 million tons this year, compared to more than 7 million tons last year.
Samir Nomani, sales director at Ezz Steel, said distributors are selling iron at prices lower than declared in order to boost demand and get rid of inventory pile-ups. He pointed out however that his company’s sales this year are comparable to those of last year and that they have no intention of exporting their stock.
Translated from the Arabic Edition.