July 20, 2008

Arab steel industry facing high cost challenges – Report

Mr Ahmad Ezz chairman of Ezz Steel, while addressing at the General Assembly of the Arab Iron & Steel Union, said that demand for the steel products in Arab during 2007 amounted to 5.5 million tonnes, with a growth rate of 15% YoY as compared to 2006. Consumption of reinforcing steel reached 4.1 million tonnes in 2007, with a growth rate coming up to 20% YoY as compared to 2006.

Mr Ahmad Ezz added that "What interprets this boom in consumption in Egypt is the fast development in a number of economic activities at the top of which comes the construction sector which has achieved a growth rate of 16% which resulted in more demand for the steel products."

Mr Ahmad Ezz also talked in his speech on the challenges faced by the steel industry saying that the consecutive price increases caused by the cost increases constitute the greatest challenge faced by this industry as this challenge has put the steel industry in a difficult position before the society which began to accuse it with exaggeration of prices and monopoly in spite of the fact that most inputs of this industry, whose prices see a price boom which is the highest one in its history, are imported from abroad.

He stressed the importance of forming a united negotiating front before the world suppliers of the raw materials to get the best possible prices and conditions indicating the importance of strengthening the Arab co operation among the producers to enhance the negotiating power with the world suppliers and get the best conditions for supply. He also said that the Arab steel industry is still outside the negotiating circle which forces it to accept what is agreed upon between producers and the major iron ore suppliers.