The Egyptian trade ministry has imposed permanent safeguard measures on imports of long and semi-finished steel products for three years, following a series of consultations with industry participants.
In a move that will sting Egyptian re-rollers, the ministry has levied a 16% import duty on the cif price of billet, or a minimum of $74/tonne. This is higher than the provisional 15% duty applied in April. The duty is levied for the remainder of the first year, which means another six months. It will then be reduced by 3 percentage points in the second year – from April 2020 to April 2021 – and by another 4p.p. in the third year.
Wire rod and rebar remain subject to a 25% duty in the first year, with a minimum payment of $125/t, subsequently decreasing by 4 p.p. each year, with a minimum duty paid at $85/t in the third and final year.
Several market participants tell Kallanish that these measures are supporting integrated steelmakers and, if left unchallenged, could ultimately destroy Egypt's re-rollers. Egyptian rebar prices may be higher than in other regions, but are still subject to pressure as the construction industry has not escaped the recent deteriorating sentiment. Competition is further emphasised by the region's becoming increasingly self-sufficient in long products supply, and while it squeezes out imports, it also challenges non-integrated longs' producers, traders explain.
But some market participants insisted trade will resume after some adjustments – and while some market participants will exit the market, others will remain. "The opportunists are not going to be able to survive, but those traders working with the region for many years, will continue with some adjustments," one source working with Egypt notes.
The investigation was initiated in November 2018, resulting in preliminary measures in April 2019, at 15% for billet and 25% for finished products. Re-rollers have tried to dispute the duties in courts, but any decision was preceded by the trade ministry’s permanent duty imposition on 12 October.