Egypt steel production slows amid dollar shortage, declining demand

Egypt "has faced a decline in production due to the accumulation of raw materials in ports and delays in customs releases caused by the scarcity of US dollars, " said Tareq El-Geyoushi to Ahram Online.

“It is true that some companies and factories within the industry have closed or decreased their production. Probably it is not permanent because it all depends on the demand and the availability of raw material," Mohamed Hanafi, the director of CMI, said.

He added that the production level has “for sure” been affected by the current circumstances.

The industry is still recovering from the COVID-19 pandemic.

In 2022, Egypt produced 9.8 million tons of steel, making it the largest steel producer in Africa and the second largest in the Middle East and North Africa (MENA) region, according to a report by Fitch Solutions April 2023.

In 2020 and 2021, Egypt produced 10.3 and 8.2 million tons, respectively, according to data from World Steel Association.

Market equilibrium
 

Despite the decline, Hanafi said “the amount of steel produced and supplied to the market [is still sufficient to meet] domestic demand.”

He pointed out that “demand declined heavily” due to several reasons including the current pause in new national megaprojects and a slowdown in the construction of new private housing.

The government's decision in January to put new projects requiring US dollars on hold has also had an impact on demand.