The Federation of Egyptian Industries submitted a report to Minister of Trade and Industry Mr Rachid Mohamed Rachid saying that local steel manufacturers lost 38% of their market share this year.
The report attributed the decrease in sales to the 2.5 million tonnes of steel imported from Turkey. It said that the introduction of Turkish steel increased supply to 1.5 million tonnes, 5 times the usual inventory rate. This caused some manufacturers to sell at a loss, while others had to close factories.
According to the report, these imports threaten current and future investment projects in the steel industry, which are worth some EGP 40 billion. They also caused the government lose USD 1.2 billion in hard currency sales.
The report said that local steel production covers market demand and allows for a reserve of 1 million tonnes every year. This balance has been shattered by foreign countries flooding the Egyptian market, which they are doing as a result of the global financial crisis.
The Federation of Egyptian Industries report said that other countries including Turkey impose customs on steel imports to protect local industries while Egypt is not taking any similar protective measures.
Local steel prices decreased 48% in November 2008 in anticipation of the first batch of imported steel arriving a month later. With an annual production capacity of 21 million tonnes and a local demand of only 6 million tonnes, Turkey has 26% of the global steel export market, making it the world's largest steel exporter.
Mr Mohamed el Marakbi steel manufacturer said that that Mr Rachid has promised to consider immediate protective measures against steel imports if it is proven that they are the reason behind the decline in local sales.