Local steel mills slash distribution quotas amid currency slump
Egyptian contracting firms are struggling to secure reinforcing steel bar supplies after local mills slashed distribution quotas by 20% to 35% and scrapped credit sales in favor of immediate cash payments, four industry sources told Al Manassa.
The sudden squeeze on supplies and credit is choking contractor liquidity, compounding financial pressures across the sector and threatening severe completion delays and stalled handovers for real estate buyers.
Sources trace the shortage to a sharp drop in imported steel billets, the primary raw feedstock for rebar. That decline followed the Egyptian state’s April decision to slap a three-year anti-dumping tariff on the material, an import barrier compounded by a volatile currency depreciation that drove domestic rebar prices from roughly 35,000 Egyptian pounds per ton early this year to 40,000 pounds per ton.
An authorized steel vendor in Cairo’s Fifth Settlement said the pound’s fall against the dollar and relentless price hikes have thrown the market into disarray. The instability forced manufacturers to scrap periodic price lists and demand spot payments rather than the deferred payment arrangements contractors historically relied upon, they told Al Manassa.
“Exchange-rate shifts are now directly reflected in factory decisions, given the difficulty of fixing prices for extended periods, which in turn has impacted sales and distribution activity across the market,” the vendor added, speaking on condition of anonymity.
The dollar reached unprecedented records in domestic bank trading last week, breaching 56 pounds for the first time before retreating slightly earlier this week.
A steel distributor based in Giza’s 6th of October City confirmed acute procurement shortfalls, explaining that producers now tie dealer quotas to cash on delivery rather than the credit facilities customary before the latest currency shocks, amid noticeable production cutbacks at several mills.
The distributor said raw material shortages spread deep into the billet sector after leading producers Ezz Steel and Suez Steel halted raw billet supplies to domestic re-rolling mills, throttling output at plants dependent on those intermediary deliveries.
Seeking to address the industry bottlenecks, Minister of Industry Khaled Hashem and Minister of Investment and Foreign Trade Mohamed Farid convened two broad meetings last month with executives representing integrated, semi-integrated, and re-rolling steel plants. The sessions focused on raw billet shortages, procurement hurdles, and baseline production rates across integrated mills.
A board member of the Egyptian Federation for Construction and Building Contractors said the federation logged numerous complaints regarding steel shortages at project sites. The official warned that protracted supply deficits will delay project handovers to developers, ultimately stalling unit deliveries to end buyers.
The sudden pivot to immediate cash payment heaps further strain on builders, forcing firms to fund massive raw material acquisitions upfront rather than leveraging deferred billing, the federation official added, noting that this cash crunch hits hardest on large-scale developments requiring phased deliveries.
The chairman of a contracting company said his firm encountered actual market sale prices far outstripping officially posted quotes, making it difficult to source materials at official baseline rates.
Persistent supply disruptions and shortages among distributors threaten project timelines if builders cannot procure materials on schedule, the contractor warned.
These supply shocks hit a sector already burdened by widespread handover delays.
A member of the Housing Ministry’s project monitoring committee previously told Al Manassa that an initial audit flagged roughly 450 real estate developers lagging behind contracted handover dates with clients, drawn from an ongoing review of around 15,000 active projects or development phases.
That audit followed directives issued by President Abdel Fattah al-Sisi last August to establish an inspection committee across the governorates to verify delivery schedules, enforce developer contracts with buyers, assess infrastructure works, and penalize non-compliant firms.