|
|
 |
|
Viewing report
|
|
|
|
Egypt Metals Report Q1 2011
Business Monitor International, Jan 2011, Pages: 47
The Egypt Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's metals industry.
The Egyptian steel industry continues to report strong growth, although it is being undermined by cheaper Turkish production and surging Middle Eastern capacity. The aluminium industry is facing its demise unless it modernises and electricity supplies improve, according to this latest Egypt Metals Report from BMI.
In 2010, BMI expects Egyptian crude steel output to grow by around 14.8% y-o-y to 6.3mn tonnes. Emphasising the resilience of the local industry, output did not follow the global downward trend after May and by October 2010, monthly production had reached 557,000 tonnes, the highest level since April 2008 (although July output was also 557,000 tonnes) and 23% up on the previous October. In 2011, the Egyptian metals market will be held back by relatively low domestic demand, compounded by a downturn in demand in Europe and expansion in output in Turkey and the Middle East, which will also undermine Egyptian exports. However, the long-term growth prospects are good, assisted by government expenditure growth and low interest rates.
There are, however, major concerns over the future of the Egyptian aluminium industry in the face of strong competition from new production capacity in the Gulf Cooperation Council (GCC), where producers have capacities of around 1mn tonnes per annum (tpa). The state-owned smelter in Naga Hammadi, which currently produces just 23,000 tonnes of aluminium annually – well below operational capacity – will need modernisation and substantial expansion over the medium term in order to remain operational and efficient.
BMI estimated apparent finished steel consumption growth of 16% to 8.37mn tonnes in 2010, with domestic crude reaching 6.31mn tonnes (up 14.5%, an increase from the 13.6% previous forecast) and hot rolled output reaching 6.8mn tonnes (up 14.5%, revised upwards from 12.5%). The industry performed ahead of pre-recession levels and compares favourably with the steel industry worldwide. The country has been operating well under full capacity, with a utilisation rate of just 65% of its 8.8mn tpa potential. Even without further capacity expansion, Egypt has the potential to grow by over 50% using currently operating plants. BMI expects annual crude output growth to be sustained at 10-14%, with 2015 volumes set to near 11.2mn tonnes. Although this represents a 77% increase over 2010 estimates, it will still not be enough to cover domestic demand, which is set to grow by 56% to around 13.06mn tonnes in 2015.
The steel industry’s growth is supported by continuing investment in new capacity. In Q410, the Egyptian government launched a tender for licences to produce 3mn tonnes of steel, requiring investments worth EGP3.2bn (US$561.9mn). The month-long tender by the Industrial Development Authority (IDA) is central to the government’s plans to boost steel production to meet growing demand from the construction industry and stabilise prices. The licences are for the production of rebar (2mn tpa) and billet (1mn tpa). The tender document did not specify the number of licences to be offered or the amount to be produced under each licence, leaving manufacturers free to determine the capacity required at their plants. In November 2010, the Ministry of Trade and Industry announced that 10 companies had applied for licences. Meanwhile, in October 2010, a technical study was launched by Egyptian Iron and Steel Company to renovate a 480,000tpa blast furnace, increasing its capacity to 665,000tpa. The company also plans to change its hot rolling system to achieve power savings of 30%. The overall cost of the upgrading plan is anticipated to reach US$55mn, taking up to three years to complete.'
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
