Warnings that local steel production won’t be able to keep up with the gap left by recently extended safeguard duties are misplaced, a source at Ezz Steel tells EnterpriseAM. Despite Egypt spending some USD 1 bn a year on billet imports, the country’s total 13.3 mn ton capacity is more than enough to absorb the roughly 9 mn tons of domestic demand annually, without the need for more billet licenses being offered, they added.

REMEMBER- Safeguard duties on imports of cold-rolled, hot-rolled, galvanized, and pre-painted steel were extended last week to run for a total of three years with a decreasing annual rate. While welcomed by local producers, downstream industries criticized the move for further squeezing margins as companies try to navigate wartime disruptions and input price rises.

The move should also help exports to markets like the EU, they claimed. With markets like the EU requiring a sizable local value-added ratio, the 10% local value-added content or so for steel made from imported billets doesn’t cut it, they explained.

The impact on prices may also be overstated, our source argued. Given the limited use of flat steel in home appliances and the automotive industry isn’t a major cost, the impact of new tariffs would be “negligible,” especially considering the existing customs protections for these goods, they added. In addition, while integrated producers like Ezz Steel were pushed to cut prices by EGP 4k to compete with cheap imports and absorb further pressures on their margins, rerolling margins have continued to post strong results.

By the numbers: Egypt imported some 4.7% of the world’s traded billets in 2024, amounting to some 2.6 mn tons. The government’s review of the sector that followed three complaints from local steel producers found that Egypt has become the world’s second-largest importer of billets.

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