Egyptian rebar demand has recovered following a weak second quarter, rising 15% on-year and 35% on-quarter in Q3, but the delayed natural gas price reduction for steelmakers is unlikely to materialize, according to EFG Hermes.
Natural gas pricing and foreign exchange (FX) availability remain “pivotal” factors to the performance of Egyptian steelmakers, the investment bank says in a note seen by Kallanish, the sister publication of Kallanish Energy.
“We remain sceptical that (the gas price reduction) would occur,” it continues. “As for FX, Egypt continues to suffer from a lack of availability, which is holding back steel raw material imports, but has also kept finished steel imports at bay and allowed local players to pass on EGP devaluation, despite taking a hit on outstanding FX debt.”
