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Experts differ on causes of rebar price hikes in Egypt A rise in steel reinforcement bar prices this month has been blamed by some on retailers looking to cash in on increased demand
Steel reinforcement bar prices in Egypt have risen by an average of LE500 ($72.5) per tonne in the last week, exceeding the cost set by the domestic producers at the beginning of the current month. Retailers nationwide are selling rebars at an average price of LE5,600 ($813) per tonne. Factory prices, excluding shipping and fees, range between LE4,850 ($704) and LE5,050 ($733). According to experts, steel prices at retailers are supposed to be around LE150-200 ($21.7-$29) per tonne more than the factory cost. Experts differ on the reasons behind the price hikes. Global prices are currently stable. The world price of the raw material (billet) stands at around $612 per tonne and the imported steel rebars stand at around $540 per tonne, according to Egypt's Metallurgical Industries Chamber (MIC). Mohamed Hanafi, the director of MIC, told Ahram Online that Egypt's steel market had been stagnant since June and retailers are now taking advantage of its resurgence. "Now, after the government has announced a stimulus package of LE29.6 billion ($4.3 billion) which will pump blood into the construction sector's veins, they want to offset their damages [from the summer's economic crisis]," Hanafi said. "The prices announced by producers on 1 November didn't see any rise," he added. Ahmed El-Zeiny, the head of building materials at the Cairo Chamber of Commerce, said that steel retailers, especially in the Nile Delta governorates, have been hoarding the 10mm and 12mm rebars to push up prices. The bars are commonly used in building houses. "As there is no governmental crackdowns on violators, retailers control prices, adding an additional LE500-700 ($72.5-$101.6) on the factories' announced sale price," El-Zeiny claimed. The Egyptian government requires domestic steel producers to announce the prices of their products monthly, to curb unreasonable hikes. Ezz Steel is the dominant steel producer in Egypt and the Middle East region, with around 55 percent of the Egyptian steel market. Solb Misr, along with Beshay Steel, shares 35 percent of the market. Smaller steel factories make up the remaining 10 percent. http://english.ahram.org.eg/News/86965.aspx
