Egypt’s Ezz steel first-half production mixed with longs up, flats down

Egyptian steel producer Ezz Steel’s first-half long steel production rose 10 percent on the year to 1.9 million mt, with flat steel output down 7 percent to 609,000 mt and billet up 12 percent to 1.98 million mt, the company said Friday.

Direct reduced iron (DRI) production in the six months to June 30 jumped 52 percent from the same period last year to 709,635 mt, the company said.

The London-list group said first-half sales volumes increased 8% to 2.5 million mt, with long sales up 14 percent to 1.98 million mt but flat sales down 9 percent to 550,000 mt.

Consolidated net sales for long, flat and other products in first-half rose 2% to EGP 25.9 billion ($1.59 billion).

The Middle East and North Africa’s largest independent steel producer said the rise was due to long sales increasing 8 percent to 20 billion pounds which was partly offset by a fall in flat sales of 16 percent to 5.58 billion pounds.

Other product sales were posted at 304 million pounds though the company did not provide year-on year comparative numbers.

“The decline in flat sales was particularly evident in the domestic markets,” Ezz Steel said in a statement Friday. “Prices declined across both long and flat steel, as well as in Egypt and the international market, during the first half of 2019.”

“However, in general, the decline slowed in the second quarter,” the company added.

Ezz Steel’s pre-tax first-half earnings (EBIDTA) totaled EGP 660 million ($40.5 million), a sharp 81 percent fall.

Ezz Steel Managing Director Paul Chekaiban said that “while again showing the operational efficiency of our plants along with the steel sector globally, we continued to suffer from the falling price of steel products and the rising costs of iron ore pellets.”

“This pressure was increased by the exceptionally high costs of funding and energy in Egypt,” he said.

Chekaiban added: “Looking forward, we expect a gradual relief from the adverse circumstances affecting our company, allowing us to fully benefit from the continued improvement of our operational performance.”

Source: S& P Global Platts