CAIRO - The shabby looking shops of the district of Sabtia, a major centre for scrap metal dealers in the northern Cairo district of Shubra, do not suggest that one of the most lucrative businesses in the country is being run there. Scrap metal, whether aluminium, copper or steel, constitutes a major raw material for several industries that provide local markets with cast finished products, such as doors, replica antiques and cheap household appliances. The soaring world prices of metals tempted scrap dealers in the course of the past five years to smuggle large amounts of local scrap metal outside the country, posing a threat to certain productive industrial sectors. According to international estimates the price of copper scrap increased by 25 per cent in 20l0 going up from $7,464 per ton to 9,415. In a bid to curtail such smuggling practices, the former Ministry of Trade and Industry had resorted to imposing export tariffs on copper, iron, lead and zinc scrap but exporters managed to twist round ministerial decisions. Instead of exporting scrap metals in their raw form, they were cast as statues and other objects disguised with layers of paint or other materials to change their characteristics, hence evading the levied tariffs. Local plants that rely on local scrap metal are today facing the threat of closing down owing to an acute scrap shortage. With the situation as such, both the Chambers of Engineering and of Metal Industries are, therefore, calling for a complete export ban on all kinds of scrap following in the footsteps of, for instance, Saudi Arabia and Russia. Mohamed el-Mohandes, deputy chairman of the Chamber of Engineering Industries, stated that they had sent several memos to Samir el-Sayyad, the Minister of Industry and Foreign Trade, suggesting the allocation of two ports only to handle metal products, in order to facilitate the detection of smuggling attempts. El-Mohandes told Al-Wafd opposition newspaper that in principle, the ministry has approved, in collaboration with officials of the two chambers, to implement prompt and viable steps to restore balance to the local scrap market. However, he admitted that in practice nothing of the kind has been effected. Owners of workshops and small plants that have been adversely affected are threatening to go on strike should they remain out of scrap. The disappearance of copper scrap in particular is putting several factories out of work because the local copper industry relies primarily on recycling copper scrap, Egypt is not a copper producing country. Experts say that the large difference between the international and local prices of scrap copper in particular is behind the crisis. According to Mohamed Hanafi, director of the Chamber of Metal Industries, the amount of copper scrap that is dealt with in the local market hits 50,000 tons a year. Unscrupulous scrap dealers are doing whatever it takes to smuggle out large quantities of copper so that they can profit from the price difference. The latest ploy in this respect, Hanafi explained, relies on melting copper scrap then pouring it into casts and finally covering it with a thin layer of aluminium layer so that the cast objects could be exported as aluminium. He explained that changing the appearance of the scrap metal usually takes place in slum areas, such as Akrasha in el-Khanqa, Inshas or Mit Ghamr, Dakahlia Governorate. In Hanafi's opinion, thorough inspection of containers in Egyptian ports, not workshops, could help reduce smuggling attempts. He also revealed that the two chambers concerned would blacklist exporters whose involvement in scrap metal smuggling has been proved. He urged the trade ministry to impose harsh penalty on violators by removing them from the exporters' records instead of merely sufficing with the usual procedure of forcing them to pay due tariffs.
