Home The Daily Beam Another Blow Stuns Egypt’s Steel Producers

Another Blow Stuns Egypt’s Steel Producers


During the week ended 5 July 2019, iron ore 62% benchmark hit a 5-year high of c.USD127/ton (+80% ytd). This leap was mainly caused by (1) a decline in China’s iron ore production following a government order to reduce pollution, which followed by higher demand; (2) a decrease in Australia’s production after a tropical cyclone; (3) less supply from Vale, the world’s largest producer of iron ore, after the dam burst in Brazil. These factors were explained in The Daily Beam published on 27 May 2019, when we warned about higher ore prices. While this will weigh significantly on fully-integrated steel producers’ margins, such as Ezz Steel (ESRS) and its subsidiary Ezz Al-Dekheila Steel (IRAX), these companies are currently stuck in an even worse situation.
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