Ezz steel [ESRS.CA] has announced that its consumer steel prices have been cut from EGP9,990/tonne to EGP9,520/tonne, which is equivalent to cEGP8,200 ex-factory price (excluding VAT). A source has attributed the decline in prices to rising competition from imported steel. It is worth mentioning that the imported steel prices are ranging between 9,300/tonne to 9,400/tonne.    According to a talk with management, the recent cut in local steel prices comes as the company is fending off competition from imported steel. We believe Ezz Steel's consecutive price cuts have been purposely aggressive to maintain market share amidst rising competition from imports, especially post the recent decline in global steel prices in the past weeks (down USD20/t since early January). However, with local ex-factory prices now being quoted at cUSD440/tonne, we think that Ezz Steel is barely at breakeven, as we estimate cash costs would come in the range of cUSD420 at current raw material prices. Management has, however, noted that the company holds a stock of low-cost inventory that will support its short-term strategy. Overall, we think that this move will be short-lived on a mix of i) some prices recovery; as well as ii) slightly lower raw material prices in coming weeks. (Company disclosure, Ahmed Hazem Maher)   Ezz Steel: EGP19.47 as of 29 January 2017, Rating: Buy, TP: EGP15.00 per share, MCap: USD566mn, ESRS EY / ESRS.CA