Egypt’s steel production has been adversely affected since the beginning of the year, as reported by two board members from the Chamber of Metallurgical Industries (CMI) at the Federation of Egyptian Industries.
CMI attributed the slowdown to a shortage of foreign currency and a decrease in local demand.
Tareq El-Geyoushi highlighted the impact of raw material accumulation in ports and delays in customs releases caused by the scarcity of USD. While some companies and factories within the industry have temporarily closed or reduced their production, Mohamed Hanafi, the director of CMI, believes the situation is contingent on demand and raw material availability.
Egypt has been a significant player in steel production, ranking as the largest steel producer in Africa and the second largest in the Middle East and North Africa (MENA) region in 2022, according to a report by Fitch Solutions in April 2023. However, data from the World Steel Association reveals a decline in production from 10.3 mln tons in 2020 to 9.8 mln tons in 2022. Despite the decrease, Hanafi reassured that the quantity of steel produced is still sufficient to meet domestic demand. He attributed the decline in demand to factors such as the pause in new national megaprojects and a slowdown in the construction of new private housing.
To sustain production, many factories have shifted their focus to exporting steel to generate foreign exchange needed for customs and other requirements. Although Egypt’s steel exports increased in quantity in 2022 compared to 2021, their value declined by 21pct to USD 1.412 bln, primarily due to currency exchange rate differences.
