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Ezz Steel welcomes Ramadan with a price hike of $857 per ton Egypt's largest steel producer blames the 3 per cent climb on global pressures and costly billet imports, but industry commentators say otherwise
Egypt's Ezz Steel says it has raised its steel rebar price by 3.1 per cent to US$857.1 per tonne (LE4,800) in August after keeping the price fixed at $830.3 (LE4,650) for the last two months. A source at Egypt's largest steel producer said the hike was due to global rises and the rise in imported prices for aluminium billet. But figures for materials cast doubt on the claims of meeting extra cost. Global prices for billet only reached $710 per ton in July against $680 in June, a rise of 4.2 per cent, according to a monthly report from the Metallurgical Industries Chamber. Ahmed Adel Sattar, a steel trader, told Ahram Online he thought the real reasons behind the hike were to shake the market out of a slump, refresh consumer demand and the onset of Ramadan. The latter typically shrinks liquidity and leads to higher commodity prices. "Beshay and Al-Garhy [both steel companies] also raised their prices to $875 (LE 4,900) and $901.7 (LE 5,050) per ton respectively against $848.2 for Beshay and $846.4 for Al-Garhy in July,” he said. Ezz Steel holds a 55 per cent stake in Ezz Dekheila. The company reported a 53 per cent drop in full-year 2010 net profit on 19 July after surging costs outweighed higher selling prices. Net profit was LE116.08 million ($19.5 million) versus 249.56 million in 2009. Net sales grew 40 per cent but cost of sales rose by 46 per cent, causing operating profit to tumble 61 per cent, according to a company statement. Ahmed Al-Zeiny, head of the construction and materials division at Cairo's Chamber of Commerce said that the three producers - Ezz, Beshay and Al-Garhy - represent 85 per cent of Egypt's total steel production. Far from being large-scale importers liable for global hikes in billet prices, the three firms are actually producers and the amount they actually import is minimal. "Even though Ahmed Ezz is under arrest the company is still practicing a monopoly," Al-Zeiny claimed. Ezz, who was also secretary for organisational affairs in the now dismantled National Democratic Party (NDP), was removed from his position as chairman of Ezz Dekheila steel company on 16 May. The Prosecutor-General has ordered the Ezz and former Minister of Industry Ibrahim Salem Mohamadein be tried for illegal profiteering and wasting public funds. According to investigators claims, Ezz accumulated LE4.82 billion between 2001 and 2011 while he was the chairman of the El-Dekheila Steel Company and furthered the interest of his own firms at the expense of El-Dekhelia of which the government was the main stakeholder.
