Egypt to impose safeguard duties on steel: Update

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Egypt will today impose provisional safeguards of up to 15pc on semi-finished steel and 25pc on rebar imports, it said in a notification to the World Trade Organisation (WTO) seen by Argus.

The country launched a safeguard probe at the end of March. The tariffs on billet and slab imports will be up to 15pc, with their rate being determined by the cif value of the material. Semi-finished steel imports priced above $550/t cif will not be subject to a duty, while any material below $450/t cif will be taxed at the maximum rate of 15pc, according to market participants.

The rebar duties will be 25pc of the imports' cif value.

The proposed measure will apply for 180 days and is designed to remedy the increase in imports arising from trade measures elsewhere — most notably in the US and EU. Egyptian mills' market share declined by 6pc year on year over the first half of 2018, and by 10pc over the second half of 2018 compared with the first six months of 2017.

A 16pc rise in Egyptian steel production over the second half of last year led to an accumulation of stocks given the rise in imported material, and resulted in higher losses for domestic mills, according to the WTO notification.

There is a risk domestic producers may need to cease production unless the safeguard is imposed, the filing said.

The measure aims to increase the growth rate of production and sales of the local industry and support the Egyptian manufacturers, the ministry of finance said.

But the Egyptian chamber of metallurgical industries may challenge the duties by taking the decision to an administrative court. The tariffs would be harmful to the industry, a source at the chamber said, adding that the decision is being imposed early before the investigation has been concluded. Egyptian re-rollers have also started a petition calling for authorities to remove the duties, which according to them will threaten domestic production.

Egypt imposed definitive anti-dumping duties on rebar imports from China, Ukraine and Turkey in December 2017. But it has seen billet imports rise as a result as Turkish mills, in particular, have ramped up billet sales.

Egypt last month imposed a regulation making it mandatory for billet importers to have a manufacturing licence, but traders operating on behalf of re-rollers can still get licences. Re-rollers have cashed in on competitively priced imported billet at the expense of local mills that have their own melting capacity, which despite existing import measures, have struggled with weak demand.