Posted on 27 Sep 2018
Egyptian Steel has signed an agreement to purchase 230,000 tonnes of ferrous scrap from compatriot state-owned steelmaker Egyptian Iron & Steel (Hadisolb), Kallanish learns from the private steelmaker. The deal includes a provision to extend the tonnage to 700,000t in future.
The move is part of the Egyptian government’s initiative to exploit Hadisolb’s unutilised assets in order to generate cash flow and help improve the loss-making steelmaker’s financial position.
The scrap will be used to feed Egyptian Steel’s electric arc furnace-based meltshops at Ain Sokhna and Beni Suef, commissioned in 2018 and 2016 respectively (see Kallanish passim). Pricing will be based on international scrap prices, Egyptian Steel says.
The Ain Sokhna and Beni Suef plants each have an 830,000 t/year crude steel and 530,000 t/y rebar production capacity. In a relatively short space of time Egyptian Steel has therefore gone from being a re-roller to having a 1.7 million t/y of crude steel capacity.
Hadisolb, meanwhile, continues to operate at below 30% of production capacity, and has had three chairmen in the last twelve months. Last January the firm launched an international tender for the procurement of a 300,000 t/y rebar mill.
Egyptian crude steel output rose 14% on-year in January-August to 5.06 million tonnes, according to worldsteel data. In January-May rebar production surged 30% to 3.34mt and domestic sales grew 18% to 3.18mt, according to Central Bank of Egypt (CBE) data.
Egyptian mills are benefiting from the five-year anti-dumping duties imposed last December on imports of rebar and wire rod from China, Turkey and Ukraine. However, Saudi mills are providing new competition in the Egyptian rebar market following the repeal by Saudi’s government of a long product export ban.
