Business Today Egypt reported that claiming major inventory build up as a result of falling steel demand driven by the slowdown in Egypt’s real estate sector, several steel companies have notified the Internal Trade Division of the Ministry of Trade and Industry that they will cease production until their inventory levels are back to normal.
The companies include Misr National Steel, Al-Obour Steel, October Steel and Meoufia Steel, though more producers are expected to send similar notifications.
Steel companies also attribute the inventory build up to the consistent flow of cheaper Turkish steel, which, they say, entered the market just as local producers were beginning to buy raw steel again following the recent demand slump.
Mr Mohamed Abou Shady head of the internal trade division at the MTI told members of the media that the request is a tactical maneuver by local producers to prove to the government that steel supply is outstripping demand. He pointed out that the companies threatening halts in production imported 265,000 tonnes of steel so far 2009.
Since they have been unsuccessful in imposing an anti dumping suit against Turkish steel importers, Mr Abou Shady said that the steel producers are trying to pressure the MTI to increase customs on imported steel. He said that the current state of the market is not a crisis but a result of a seasonal decrease in demand coinciding with reduced demand during Ramadan and the low season for new real estate projects.