Egypt
has imposed a definitive safeguard duty on rebar imports of 8% of the cif value
or EGP 408/tonne ($53), whichever is greater. This is to protect local
steelmakers – who have been hit by energy price hikes and shortages – from a
surge in rebar imports, Egypt’s trade and industry ministry says.
The
tariff has been imposed for three years and will be reduced to EGP 325/t in the
second year and EGP 175/t in the third year to allow the local steel industry
to implement a “structural adjustment plan”, the ministry says in a statement
seen by Kallanish.
Last
October the government imposed a provisional 200-day rebar import duty of 7.3%
or EGP 290/t after Egypt’s metallurgy chamber filed a request for a safeguard
investigation (see Kallanish 15 October). The chamber, representing 68%
of domestic producers, filed documents that showed local inventory surged and
mills incurred EGP 496.25 million of losses in January-September 2014 as a
result of imports.
The
World Trade Organisation was notified of the investigation and all affected
parties, including the EU, Turkey and Ukraine, allowed to express their views.
The
probe’s conclusion was that increased imports were causing injury to domestic
industry. Rebar imports surged 251% in January-September 2014 versus the same
period in 2011. Moreover, energy shortages, low market share of domestic
producers, and low labour productivity were shown to be factors. The EGP
496.25m of losses and a 53% increase in inventory in January-September were
also confirmed.
Egypt’s
economy is undergoing a fragile recovery after investment was hit hard by the
2011 revolution. In 2014 rebar production in the country declined 0.9%
year-on-year to 7.29 million t, while sales dropped 5.7% to 6.86mt, according
to the Arab Iron and Steel Union.
Steel
output at most producers has been affected negatively since gas prices for
steel producers were increased last July by $3/million BTUs to $7/m BTUs in a
bid to remove state subsidies. Mills have asked the government to rescind
natural gas price hikes, arguing that re-rollers are not extensive energy
consumers, while DRI-based producers use gas as a raw material rather than as
fuel.
Rebar
imports from Turkey, traditionally Egypt’s main supplier, surged 105% in 2014
to 417,476 tonnes. However, as a result of depleted dollar reserves, Egyptian
banks are now reported to have reduced issuing letters of credit or providing
foreign currency to fund steel imports.
Source- Kallanish