The US Commerce Department issued a report on Friday that suggests imposing tariffs on steel imports from a list of 12 countries, with Egypt included. The department recommended a tariff of 35% on the following countries: Turkey, Vietnam, Thailand, Russia, South Africa, Brazil, Costa Rica, India, Malaysia, South Korea and China. The report also suggested that other countries be subject to a quota limiting their tariff-free access equal to their 2017 steel exports to the United States. There were other alternatives brought forward by the report, such as: i) a global tariff of at least 24% on all steel imports from all countries; or ii) a quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the US. The report explains that those measures would be driven by the fact that US steel imports have risen to four times their exports (mainly from China). 
 
We think the impact of such an action remains relatively negligible for Ezz Steel, which sells the bulk of its production in the local market and does not compete for market share in the US market. The ramifications of such an action, however, could drive tonnage from major export oriented markets (such as China) into the global market. That being said, Egypt should be relatively shielded from an influx of volumes on the back of its own imposition of anti-dumping fees on steel from: i) China; ii) Turkey; and iii) Ukraine.

Ahmed Hazem Maher