China spooks Egypt's steel makers
A wave of alert follows the announcement that a Chinese steel freight will be sold for around EGP 700-800 less than Egyptian steel.
The news caused local steel producers to panic, forcing Ezz steel to lower its prices by EGP 250 per tonne, reaching EGP 4,080 for factories and EGP 4,230 for the final consumer, according to Al-Masry Al-Youm.
“There’s nothing technically flawed about the shipment, and there’s a probability that there won’t be any flaws” said the General Manager of the Chamber of Metal Industries at the Industrial Development Authority (IDA) Mohamed Hanafy.
South Asian countries such as India, Malaysia and Indonesia, banned imports of Chinese steel as soon as entered it the international market. The United States imposed a $100 per tonne fee for the importation of Chinese steel, Hanafy told the Daily News Egypt.
“Chinese steel will affect Egypt’s local markets, especially since it has the same quality as the Egyptian one. Its price is lower than the Egyptian steel by around EGP 700 to 800 per tonne, which may drive consumers to rush into buying it” said Hanafy.
According to Hanafy, China subsidises 18 per cent of the price of its steel. Once it becomes known in the Egyptian market, it will attract consumers.
“There are official discussions around how to deal with this kind of unwanted steel” said Hanafy. “Government should restrict it once the shipment enters Egypt, either by imposing fees or by banning it” he added.
Owners of small factories cheerfully welcomed the freight as it has the same quality as the Egyptian steel, and lower price.
“Chinese steel is a way to force local steel companies to lower their prices. Egypt needs millions of tonnes of steel annually,” said Hossam El-Hawary owner of a metal house factory for wrought iron design.
“For me, of course I will pick the Chinese steel as it’s cheaper. If its price is lower by EGP 700 to 800, I will save 0.7 or 0.8 pilasters per kilo,” said El-Hawary.
- Putting the 'ease of doing business' index to test: all you need to know about setting up a business in Dubai
- What can the GCC learn from China's economic model?
- A blessing in disguise? The Lebanese respond to economic crunch with small cars
- Abu Dhabi as the Star Wars' set: the region's superstar?
- What will the effect of losing the World Cup be on Qatar? 'Very small' says study