Local steel factories decrease prices by $16.5/ton in April

CAIRO - 4 April 2017: Steel prices recorded a significant decline of 300 EGP ($16.5) per ton in April, a slip mainly driven by inflationary recession in the local market, Youm7 reported Sunday.

Ezz Steel Group priced the ton at 9,500 EGP (factory delivery) compared to 9,850 EGP in mid-March. The prices of Beshay Steel Group dropped to 9,500 EGP per ton compared to 9,750 EGP in the middle of last month.

“The factories are forced to decrease their prices to cope with the notable recession in the domestic market,” Tarek Al-Guoshy, the Metal Industries representative in the Federation of Egyptian Industries, said in a statement.

Guoshy added that decreasing prices came despite manufacturers' heavy losses on the back of the hike of the dollar’s exchange rate after the Central Bank of Egypt floated the Egyptian pound.

The price of raw steel pellets held steady on the global market at $410 per ton on average.

"Steel production costs have recently registered high rates due to an increase in the price of natural gas supplies to factories, which are valued in U.S. dollars and according to international prices,” he added.

Steady global pellet prices along with the high dollar exchange rate, combined with a 13 percent value added tax and 0.5 percent customs tax, are taking a heavy toll on steel factories, which are incurring significant losses, according to Guoshy.