{"id":80322,"date":"2024-08-13T00:00:00","date_gmt":"2024-08-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/08\/13\/today-lots-of-egypt-updates-more-earnings-from-adnoc-gas-air-arabia\/"},"modified":"2024-08-13T00:00:00","modified_gmt":"2024-08-13T00:00:00","slug":"today-lots-of-egypt-updates-more-earnings-from-adnoc-gas-air-arabia","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/08\/13\/today-lots-of-egypt-updates-more-earnings-from-adnoc-gas-air-arabia\/","title":{"rendered":"TODAY: Lots of Egypt updates + more earnings from Adnoc Gas, Air Arabia"},"content":{"rendered":"

Good morning, ladies and gents. <\/strong>We have a brisk issue this morning that\u2019s heavy on the Egypt updates in all things trade, but first, a quick status update on how things are looking for AD Ports\u2019 M&A ambitions\u2026<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a>#1- AD Ports + Turkey <\/strong>push<\/strong> to finalize Izmir Port acquisition:<\/strong> AD Ports is continuing negotiations with Turkey to establish a joint venture for the operation of Izmir Port after approximately eight months of delay, Reuters<\/a> reports, citing people familiar with the matter. AD Ports has been in talks to acquire a stake in the key Turkish port of Izmir in a USD 500 mn transaction since December<\/a>. <\/p>\n

What was causing the delays? <\/strong>Turkey was exploring other buyers, but has decided to advance with AD Ports, one of the sources says. Conditions on capacity and competition delayed the final agreement, the source added. <\/p>\n

What we know:<\/strong> The agreement will see AD Ports shell out investments in an entity established by Turkey\u2019s sovereign wealth fund, the Turkish Wealth Fund (TWF), to operate the facility. Details of the arrangement are yet to be finalized.<\/p>\n

<\/a>#2- <\/strong>Iran is looking to establish a special mineral economic zone with Afghanistan<\/strong>, according to a statement<\/a>. Iran is also discussing cooperation with Afghanistan in mineral exploration, investment in road and rail construction, and the establishment of an iron ore processing plant. \u201cIran can increase its transit role in the import and export of Afghanistan from the current 50%,\u201d Tehran Times<\/a> reported last week, citing statements by Iran's commercial attach\u00e9 in Afghanistan Hossein Roustaei. <\/p>\n

Why is this important? <\/strong>Afghanistan fulfills over 80% of its market needs through imports with Iranian exports constituting 25% of the demand, Roustaei said during a Iran Chamber of Commerce, Industries, Mines and Agriculture meeting on the economic viability of the Afghan market. Iran exported over USD 724 mn worth of goods to Afghanistan in the first four months of the current calendar year (March 20-July 21) with a 28% increase y-o-y, he added. Afghanistan's import priorities include food, agriculture, fuel, medicine, medical equipment, and construction equipment.<\/p>\n

#3- <\/strong>The first transformer at the Egyptian-Saudi 500 kV interconnection station in Egypt\u2019s <\/strong>Badr City was installed on Saturday<\/strong>, according to a statement<\/a> released. The interconnection aims to enhance the electrical grid\u2019s connectivity with neighboring networks and allow countries to trade their renewable energy. The transformer built in Badr City is the first of its kind in the Middle East in both size and type of technology employed.<\/p>\n

The project is coming a long way:<\/strong> The infrastructure for the 3 GW Egypt-Saudi interconnection project<\/a> was around 40-50% complete in February. The project \u2014 which consists of three stations connected via 1.35 km of overhead lines and 22 km of submarine cables in the Gulf of Aqaba \u2014 is expected to come fully online in 2026.<\/p>\n

#4-<\/strong> TCI Sanmar eyes more expansions in Egypt: <\/strong>Indian chemical firm TCI Sanmar is looking to pour AED 300 mn into Egyptian projects, including the expansion of the company\u2019s factories in Port Said for AED 150 mn as well as establishing a new terminal<\/a> for loading ethylene at West Said Port for another AED 150 mn, according to a statement<\/a>. The company \u2014 which currently exports 70% of its production and directs 30% to the local market \u2014 is looking to allocate 100% of its production to the Egyptian market in a bid to reduce imports and preserve foreign currency.<\/p>\n

TCI Sanmar\u2019s footprint in Egypt: <\/strong>TCI Sanmar inked an MoU last year with Egypt\u2019s state-owned United Gas Derivatives Company (UGDC)<\/a> allowing it to use its Damietta Port facilities for importing raw materials. The firm had also announced plans back in 2022 to invest an initial USD 160 mn to set up a loading terminal<\/a> near Port Said to import ethylene.<\/p>\n

<\/a>IN OTHER NEWS- The<\/strong> EU is investigating Egyptian steel exports: <\/strong>The European Commission has initiated an anti-dumping investigation into hot-rolled flat products of iron, non-alloy or other alloy steel imports from Egypt, India, Japan, and Vietnam, it said in a statement (pdf)<\/a> last week. The probe follows a complaint by the European Steel Association calling for the imposition of anti-dumping duties.<\/p>\n

Who is involved? <\/strong>Ezz Steel, Egypt's sole exporter of hot-rolled flat steel to the EU, received a notice from the Commission last week, it said in a statement<\/a> to the London Stock Exchange. The company, which considers the EU a major market for its flat steel exports, has pledged full cooperation with the investigation. <\/p>\n

What\u2019s next?<\/strong> The exporters under investigation will be required to provide detailed data in the next few weeks, Ezz Steel said. The investigation is expected to be lengthy given the involvement of multiple countries and the complexity of the required data, it added.<\/p>\n

#5- <\/strong>Ukraine doubled its food exports to over 4.2 mn metric tons in July<\/strong>, part of which may be headed to Egypt, Reuters<\/a> reports, citing Kpler data. The Eastern European country is rushing to send out as many grain shipments as it can to capitalize on Black Sea military gains, even amid an escalation in Russian attacks on its ports. \"We are doing everything to make business feel comfortable even in wartime conditions,\" said Ukraine\u2019s Seaport Authority deputy head Dmytro Barinov. Ukraine exported a majority of its wheat to Egypt, Spain, and Indonesia last season.<\/p>\n

\n

MARKET WATCH- <\/p>\n

#1- <\/strong>Opec+<\/strong> has trimmed its outlook for growth in global oil demand in 2024 and 2025 on the <\/strong>back of expectations of softened demand in China<\/strong>, according to the group\u2019s monthly report (pdf)<\/a>. The oil cartel now sees oil demand rising by 2.1 mn barrels per day (bbl \/ d) this year to 104.3 mn bbl \/ d, down from its previous forecast of a 2.25 mn bbl \/ d increase. <\/p>\n

The 2025 forecast:<\/strong> Opec+ has also revised down next year\u2019s demand growth for crude oil, penciling in a 1.78 mn bbl \/ d increase, down from 1.85 mn bbl \/ d. <\/p>\n

THE MARKETS RESPONDED- <\/strong>Oil prices dipped in early morning trading<\/strong>, breaking a five-day streak of gains, as concerns emerged over Opec\u2019s trimmed growth outlook, Reuters<\/a> reports. Brent crude futures fell by USD 0.78 to USD 81.52 a barrel by 03.30 GMT, while US West Texas Intermediate (WTI) futures slipped down USD 0.77 to USD 79.33 a barrel. <\/p>\n

#2- <\/strong>Baltic index decreases for third straight session: <\/strong>The Baltic Exchange\u2019s dry bulk sea freight index \u2014 which tracks rates for the capesize, panamax, and supramax vessel segments \u2014 fell 0.9% to 1,655 points<\/a> on Monday to its lowest session since April 10. Capesize decreased 1% to 2,413 points, down for a third consecutive day. The panamax index was also down 0.9% to a one-month low of 1,584 points, while the supramax segment dipped further by 0.5% to 1,294 points. <\/p>\n

DATA POINT- <\/p>\n

Egyptian state grains buyer GASC <\/strong>purchased 280k tons of wheat in a tender that closed yesterday<\/strong>, locking in just c. 7% of the 3.8 mn tons it aimed to purchase<\/a>, Bloomberg<\/a> reports. The authority bought five cargoes from Ukraine and Bulgaria for October and November delivery at between USD 259.24-269.25 a ton, including freight.<\/p>\n

ICYMI- <\/strong>The authority last week launched Egypt\u2019s largest wheat tender to date, hoping to secure 3.8 mn tons in a bid to capitalize on a dip in wheat prices. The tender came with a much longer timeframe than usual, requiring bidders to submit offers months in advance for shipments from October to April. <\/p>\n

That\u2019s a wrap on Egypt\u2019s local harvest season. <\/strong>The Egyptian Supply Ministry secured 3.6 mn tons of Egyptian wheat during the local harvest season, which drew to a close this month, sources at the ministry told Al Borsa<\/a>. <\/p>\n

THE ENTERPRISE FINANCE FORUM- <\/p>\n

Are you planning to be in Egypt on 24 September? <\/strong>You may be interested in attending our 2024 Enterprise Finance Forum. Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders. <\/p>\n

Why attend? We\u2019re in the early days of a generational realignment of power in our <\/strong>industry<\/strong> \u2014 in our region and beyond \u2014 and on the cusp of the biggest intergenerational transfer of wealth the world has ever seen<\/strong>. With that as the backdrop, we\u2019re going to take stock of where we stand six months after the float of the EGP and ask what\u2019s next for finance in Egypt and the wider region. Among the questions we\u2019ll be asking:<\/p>\n