{"id":686400,"date":"2026-02-15T00:00:00","date_gmt":"2026-02-15T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypt-set-to-auction-new-billet-licenses-to-break-steel-market-deadlock\/"},"modified":"2026-02-15T00:00:00","modified_gmt":"2026-02-15T00:00:00","slug":"egypt-set-to-auction-new-billet-licenses-to-break-steel-market-deadlock","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypt-set-to-auction-new-billet-licenses-to-break-steel-market-deadlock\/","title":{"rendered":"Egypt set to auction new billet licenses to break steel market deadlock"},"content":{"rendered":"

\ud83c\udfed The <\/strong>Industry Ministry is set to meet with 10 major companies, including El Garhy, El Marakby, and El Ashry, to initiate the bidding process for eight new billet production licenses<\/strong>, a source with knowledge of the matter tells EnterpriseAM. A move over two years in the making, the core objective is to localize raw material production and reduce reliance on imports, which have heavily drained the state\u2019s FX reserves, Metallurgical Industries Chamber Director Mohamed Hanafi tells us.<\/p>\n

The government will auction the licenses across three production tiers<\/strong>, a move expected to attract considerable investment, our source tells us. Companies are already preparing their financial reserves \u2014 Ashry Steel Group Chairman Ayman El Ashry tells EnterpriseAM he has applied for a license<\/a> to produce 1 mn tons annually, with investments totaling EGP 1.2 bn.<\/p>\n

These developments come at a particularly sensitive time as the government seeks to stabilize the prices of end-use goods that rely on steel<\/strong>, such as electrical appliances and automobiles, by ensuring a steady supply of local inputs, Hanafi tells us. Last September, the government imposed a temporary 200-day protection measure<\/a> on steel and billet imports to protect the local industry following a four-year suspension of lower duties. <\/p>\n

However, current domestic production has proven insufficient to meet demand<\/strong>, while imports have become prohibitively expensive on account of duties reaching 16.2% of the cost, ins., and freight value \u2014 no less than EGP 4.6k per ton. This has essentially left rolling mills between a rock and a hard place, industry sources tell us. This coincides with the rollout of incentive packages for local manufacturers<\/a> aimed at accelerating the localization of several sectors, with the engineering and automotive industries at the forefront.<\/p>\n

The end goal?<\/strong> To transition from importing billets and rolled sheets to full-scale local manufacturing. Applications are currently being vetted ahead of technical and financial bid submissions in the coming days.<\/p>\n

Integrated mills \u2014 which handle the process from start to finish \u2014 argue that billet imports flooded the market with cheap products<\/strong>, causing losses and eroding margins. Billet imports jumped 10x over five years to reach 1.7 mn tons, costing the state USD 1 bn annually in foreign currency, according to a report from the General Organization for Export and Import Control seen by EnterpriseAM. For these mills, imports are unjustifiable given that local production capacity \u2014 some 13.7 mn tons \u2014 exceeds local consumption of 7 mn tons. <\/p>\n

On the flip side, rolling mills \u2014 which purchase and shape billets \u2014 have been hard-hit by protection measures and local raw materials shortages<\/strong>, Chamber of Metallurgical Industries Vice Chairman and El Marakby Steel Chairman Hassan El Marakby tells us. Some factories were led to halt operations entirely due to the high cost of imports, he added. <\/p>\n

To melt or to roll, that is the question. <\/strong>Figures reveal a significant gap in the risk-reward profiles of the two production models:<\/p>\n