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Rebar prices in local markets continued to decline during the second week of January, as a result of declining market demand and an increase in inventory in factories.
Most of the factories resorted to offering discounts in the form of price incentives for the merchants to enhance the opportunities for the disposal of their accumulated products in the stores after the wave of bad weather pressed the sales further, according to dealers and agents of iron companies.
Ali El Desouky, President of El Seouf Reinforcement Steel Company, said that the market has suffered from declining withdrawals during the past two months, and the wave of bad weather has increased the slowdown in construction work, especially in Lower Egypt governorates.
The companies raised the rates of incentives granted to the merchants in an attempt to move the market, as Ezz Al-Dekheila Company, the largest producer of reinforcing steel, provided incentives in the form of price reductions to their agents, by 470 pounds per ton, bringing the selling price to the agent during the current week ten thousand and one hundred pounds per ton, compared to ten thousand and 570 Pound per ton on the first of January, the prices of selling a tea factory fell from ten thousand two hundred pounds per ton to ten thousand pounds only, and the price of Egyptian steel reached nine thousand and eight hundred pounds, while the average prices of selling the investment factories (rolling) ranged between 9500- 9800 pounds A ton. Merchants believe that the decline in sales of individuals and real estate companies during the second half of last year, negatively affected the factories, and according to “El Desoky”, the share of the individuals and companies sectors declined, to reach 30% after the past years reached 60%, and in return the share of withdrawals from Iron in favor of national government projects.
Khaled Al-Dajwa, head of Al-Masiya steel reinforcement company, said that sales decreased by 50% during the last two months, as a result of a lack of liquidity in the markets, as well as low demand in the markets, price pressures and government fees imposed on the imported pallet, which led to large stops of the rolling factories. According to the monthly statistics bulletin issued by the Central Bank, armature sales fell 37% during last August, while the relative improvement came back in October and November, to register an increase of 11% in November, but most traders monitored the sales decline more by December and January. And on his expectations for an improvement in demand during the coming period, Al-Degwa said that this requires government moves to inject liquidity into the markets, pay the dues of late construction companies, and expedite the issuance of licenses required for companies.
The decline in prices domestically, at a time when pallet prices rise in global stock exchanges, to record $ 440 on average, compared to $ 360 last October. Ayman El-Ashry, President of El-Ashry Company for Rolling, said that most of the rolling factories dependent on the imported pallet are completely stopped, as a result of the government fees that were imposed last October on the imported pallet, and its high prices internationally, which led to the factories suffering losses of up to 1000 pounds per ton if the operation resumes .