Ezz Steel slashes November rebar prices by USD50 ahead of scheduled announcement

Egypt’s largest steel manufacturer, Ezz Steel, has slashed its domestic rebar prices for November by EGP 300 ($50) per ton in a surprise move that came one week ahead of the monthly announcement of new prices scheduled at the beginning of each month. The early announcement stirred uproar from traders who claim they now have to sell their stock below cost. But a senior spokesperson at Ezz Steel told MEsteel (mesteel.com) that the new price was an internal strategic decision which had to be made at this point in time for a number of reasons.

The new price is set at EGP 4,500 ($753), including VAT, ($697 excluding VAT) per ton ex-works – down from EGP 4,800 per ton. The new rate brings locally produced rebar closer to that of Turkish imports, which slipped again early this week to an average of $660 per ton FOB Turkish ports – making its CFR Egypt price average at $680.

“International prices of rebar have in the past few weeks declined by as much as $60-$70 per ton, in tandem with falling prices of semis, and accordingly we had to reduce our offers to match the global trend,” said an Ezz Steel spokesperson. He added that the reduced price might also help improve demand in the market, which had been bogged down by political and economic uncertainty. The new price, which is a six percent reduction, constitutes the largest single drop in domestic rebar price this year.

The new price, which was announced last week, would officially come into effect on November 1, but the announcement has stunned an already weak demand for any offer above EGP 4,500. The official retail price for Ezz Steel rebars published in Egyptian newspapers on October 26, following the announcement, was set at a ceiling of EGP 4,640 per ton, which is based on the November price.

Rebar traders in the domestic market were reportedly angered by Ezz’s early announcement, saying that it was irregular to be made before the beginning of the month, and claiming that they had to sell “substantial amounts of stocks” below their cost.

One trader was quoted as saying that he would continue importing Turkish rebars, and that he was sure that Turkish producers would not give up the large Egyptian market and that they would try to be more competitive with respect to falling prices of Egyptian rebars.