Ramy Saleh from Egyptian steelmaker El Marakby Steel began his speech at the SteelOrbis Italy Forum 2024 by giving an overview of the global and Egyptian economies. Mr. Saleh stated that Egypt is struggling with a PMI below 50, skyrocketing inflation and interest rates, though inflation should ease soon and interest rates should follow. Furthermore, Egypt is also suffering in its trade balance, with its imports being double its exports. On the other hand, a significant boost to the economy came this year from the UAE. Another difficulty Egypt has to face is that traffic in the Red Sea has decreased noticeably and Egypt could suffer the largest fiscal effects from the combined effects of the Suez Canal crisis and the conflict in the Middle East, as a result of lower fiscal revenues and tourism receipts.
Turning to the steel industry, Mr. Saleh stated that per capita consumption is not good in Egypt and that China’s exports surged in 2024. Even though crude steel and DRI production increased, producers in Egypt are facing tight profit margins in comparison to previous years and operating profits have been going down from 2021 onwards. Even though billet capacity utilization has increased in Egypt, the country is still importing a lot of billets, especially from Russia, Ukraine and Indonesia. Furthermore, both rebar and HRC consumption dropped in 2023. Saleh reminded the audience that since July 2024 the quota system of the European Union has been changed to include a 15 percent cap for both wire rod and HRC under the ‘other countries’ category, which for Egypt means around 142,000 mt for HRC and 18,000 mt for wire rod for the last quarter of 2024. Also, in August 2024, Ezz Steel received a notice from the European Trade Commission regarding the initiation of an antidumping investigation into imports of HRC steel originating from Egypt, India, Japan, and Vietnam.
With regard to decarbonisation, the El Marakby Steel official underlined the importance of the green transition even though the Egyptian steel industry is facing many challenges. For one, it will make steel production more expensive and the demand for clean energy is huge. Moreover, the investments needed to decarbonize the steel sector are huge, and steel mills cannot move forward without more green financing solutions and, according to World Bank reports, the MENA region is one of the smallest recipients around the globe, at around $16 billion, in comparison to estimate of $186 billion needed. However, according to Saleh, the green transition is also an opportunity for the MENA region as most steel producers are either DRI-EAF based or scrap-EAF based, and these routes are by nature lower in their carbon footprint in comparison to the BF-BOF production route. The region also has some good potential for renewables, hydrogen and carbon capture, utilization, and storage, he said in conclusion.