Ezz Steel has raised the price of finished steel products by EGP 1,000/tonne to EGP 13,654/tonne (including VAT). On a cumulative basis, the price hike amounts to 35% since 19 November.
Naeem Research sees that the move is very much aligned with last week’s indications of the impending hike, as iron ore prices continued to surge closer towards a 10-year high.
Latest trends show that iron ore (62% fe) from Australia to China rose to $175/tonne, up by 97% on a year-to-date (YTD) basis. The riseleaveslimited options available for local producers (including scarp and billet importers), due to the sudden shift in the cost curve.
Naeem Research added that with Ezz Stell using a higher-grade ore (67% fe), the impacts on raw material costs for imported iron ore are likely to be higher.
“We reiterate our view that for Ezz Steel and its subsidiary Al Ezz Dekheila Steel – Alexandria, price hikes at higher price points come as a positive development, as profitability in EGP terms accelerates at higher levels on a per tonne basis,” the entity said.
Ezz Steel’s consolidated financial statements showed net losses of EGP 4.11bn in the first nine months (9M) of 2020, down by 4.8% from EGP 4.321bn reported last year, including minority shareholders’ rights.
The company’s net sales declined to EGP 26.45bn in the period from January to September 2020, compared to EGP 35.25bn in the corresponding period a year earlier.
