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New tariffs hits small steel producers in Egypt

The Arab Weekly reported that small steel producers in Egypt face an uncertain future after the application of protectionist tariffs to iron billet and steel imports. Mr Tareq al-Gioshi, a steel factory owner said that “The new tariffs will raise the price of production requirements. This will cause losses to producers, given the fact that they cannot raise the price of their final products.”

The Egyptian Ministry of Industry and Foreign Trade started applying the tariffs April 15 to protect the local steel and iron billet industry against imports. The tariffs set for 180 days, although they could be extended amount to 15% on iron billet imports and 25% on steel rebar. The ministry investigated semi-finished products of iron or non-alloy steel and steel rebar for construction purposes. On April 3, it said growth in imports had harmed Egypt’s domestic steel industry.

One of the reasons local producers are losing to foreign suppliers is that production costs are considerably higher in Egypt, which producers attribute to the lack of government support and high energy prices.

Egypt’s construction sector has been growing steadily with dozens of national megaprojects ordered by the government in all provinces. The Egyptian government is spending billions of dollars on the construction of electricity plants, roads, bridges and factories. The projects have created demand for construction materials, in general, and construction steel, in particular. The real estate sector has also been expanding, even as demand dropped, with the prices of housing units out of reach for millions of Egyptians.

Source : THE ARAB WEEKLY

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