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Iron in grip of local factories.

Local iron mills now control the iron market after the Ministry of Industry applied anti-dumping duties on iron imports from China, the Ukraine, and Turkey for a period of five years, ending in June 2021, amid objections from importers on the decision.

Minister of Industry Tarek Kabil said that the decision followed complaints from local factories, which showed that they were affected by the large increase in imports of steel from the three countries.

He explained that the factories have submitted documents and evidence documenting the practice of dumping the market with iron imports at prices lower than local iron, highlighting the relation between them and the financial damage over the past years.

Ibrahim El Segeeny, head of the Trade Agreement Sector, said that the sector has sent questions and started investigating all local and foreign parties in January, before giving a 37-day grace period from the date of receiving the questions, for a response between 28 February and 7 May 2017.

The ministry imposed the fee for five years but amended the rate to 29% on imports from China, instead of 17% during the announcement of temporary fees in June.

Imports from Turkey also range between 7% and 22.8%, compared to 10% and 19%, while imports from the Ukraine reached 17.2% to 27%, compared to 15% and 22% of the cost, insurance, and freight (CIF) value.

The Advisory Committee discussed the final report prepared by the investigative authorities in November and concluded with a recommendation to impose fees. The sector will inform the World Trade Organisation of the results.

Mohamed Hanafy, executive director of the Chamber of Metallurgical Industries of the Federation of Egyptian Industries (FEI), said that the decision is a step towards development of local industries and helping them before imports.

A source at Suez Steel said that the opportunity is available to develop the sector amid absence of iron imports, especially since the real production cost is higher than the selling price at factories.

The importers were angered by the decision, as local production was unable to meet the needs of the market. "The opportunity is available for factories to control prices," they said.

Local factories have maintained steady selling prices since the beginning of October at EGP 11,650-11,970 per tonne at production plants and have not been amended since. Investment factories raised prices by EGP 100 recently.

Sameh Galal, the head of Salah Brothers for iron imports, said that the companies kept prices unchanged over the past period to push the state against iron imports, adding that the government is punishing the market for imports results in a period that ended in 2016.

Sources in the Ministry of Industry told Daily News Egypt in previous remarks that dumping investigations are based on the size of imports in the past three years, not this year, at 1.8 million tonnes in 2016 compared to 1.1 million tonnes in last year, up by 63%.

Abdul Aziz Qassem, secretary of the Chamber of Building Materials Industries, said that the ministry took what it deemed appropriate to protect the local industry. However, he criticised the period, saying it should have been three years as the minimum set by the WTO as an anti-dumping fee.

He pointed out that international prices for iron range from $530 to $540 per tonne, noting that local prices will rise in the coming period as the market becomes dominated by factories.

During the first eight months of this year, imports of iron fell to 300,000 tonnes, compared with 1.261 million tonnes in the same period last year, driven by the liberalisation of the exchange rates, which caused the local currency to lose half of its value before foreign currencies.

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Publication:Daily News Egypt (Egypt)
Date:Dec 6, 2017
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