The real rate of protection fees imposed on imported steel is 11.85%, not the 8% the Ministry of Industry and Foreign Trade is claiming, said Tarek Abdel-Azeem Vice Chairman of the Iron and Steel Committee at the International Business and Investment Association (IBIA). Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour imposed protection fees on imported rebar steel, at a percentage of 8% for one tonne, or no less than EGP 408 per tonne. The decision will last for three years, with the first years' protection rates amounting to the prior mentioned fees. The following year, they will reach EGP 325 per tonne, and the year after they will stand at EGP 175 per tonne. "By doing the maths, imposing a rate of EGP 408 on current imported steel prices is not equivalent to 8%, but equal to 11.85%," Abdelazeem said. The decision comes after imposing temporary protection fees on imported steel for 200 days that started from October 2014. The step was taken by the ministry to protect the local industry from a significant increase in steel imports. Abdelazeem further noted that the decision is incompatible with the international GATT agreement that Egypt signed, and will threaten to hold Egypt responsible in front of the international community. Ahmed Elzainy, head of the Building Materials Division at the Federation of Chambers of Commerce, said the decision was not well studied and that only local producers are than ones going to benefit from it. He added that low income people will suffer in the coming phase. The country is going to need huge amounts of steel in the coming period to meet the needs of its mega projects, including the new administrative Capital, the 1m residential units and others, Elzainy said. "Those needs, however, will not solely be met locally as the domestic market alone won't be able to cover those needs," he noted. With this decision at hand, local producers will heighten their prices as the demand for steel will increase and with the extra imposed fees even imported steel prices' will be high. This in turn will harm Egyptians of low income, as prices for residential units will boom due to higher costs. "A neutral committee under the supervision of the presidency and the Armed forces should've been formed to study the needs and demands of the country for the coming 10 years, and accordingly the decision should've been taken as the country will need not less than 3 million tonnes of imported steel in the coming years," he said. Meanwhile, Sherif Al-Kheshen, head of Al-Kheshen Company for Steel Distribution, said that he is in favour of the decision, saying that it is a positive step for protecting Egypt's industry. Al-Keshen does not believe the decision will lead to a hike in prices of steel in the coming period, claiming that prices move in line with the international stock market steel prices. He further noted that Egypt is now in great need of hard currency, and it needs to decrease its dependence on imports. "The main problem lies in retailers who do not abide with the international prices of steel, and tend to increase their prices when selling to the final consumer," Al-Kheshen stated. Sayed Atrees, a steel importer, added that he is with the decision, as it will benefit the local market and protect the local industry. He said that the decision is normal and various countries follow a similar track.
