Egypt's total non-alloyed aluminium exports in 2016 estimated to be valued at US$85.6 mln

Egypt aluminium industry had been logging a healthy growth being driven by a steady demand from the building and construction sector before the Egyptian government took the courageous steps of liberalising its currency while raising fuel prices and import tariffs at the same time, very recently. Among the goods affected the most are aluminium products. Higher upstream the value chain, the primary industry which once enjoyed the advantage of being a low-cost producer due to availability of cheaper fuel will now be faced with the challenge of coping with shrinking margins, since prices of the metal have been falling across major bourses on the back of a global glut. Egyptalum with a total annual production of around 320,000 tonnes is the largest aluminium smelting company in Egypt.

Egypt's total non-alloyed aluminium exports in 2016 estimated to be valued at US$85.6 mln

Non-alloyed aluminium, which is used as a raw material for further downstream manufacturing, is one of the top exported commodities of Egypt. The country exported a total volume of 25,674 tonnes of non-alloyed aluminium in 2014. In 2015, the volume improved 40.9 per cent to total at 36,184 tonnes. In 2016, Egypt is estimated to ship around 49,246 tonnes of non-alloyed aluminium to the international markets, up 36 per cent from 2014.

Value-wise, Egypt's total non-alloyed aluminium export in 2014 was estimated at US$50.2 million. In 2014, the value soared to reach US$72.1 million, up 43.6 per cent from 2014. In 2016, total export of non-alloyed aluminium from Egypt to the world market is estimated to reach US$85.6 million, marking a significant increase of 18.7 per cent from 2015.

According to market analysts and economists, Egyptian government's decision to increase import tariffs is going to hurt the country's downstream aluminium industry significantly. The only possible benefit from tariffs might be that they are a fairly easy way to raise revenue for a government desperately trying to balance its budget deficit, now running at about 12.5 per cent of GDP. But if the finance ministry feels it is in such critical need of funds, a far better approach could be sought.

However, aluminium smelting business will get affected from the raised fuel prices. Given the fact that aluminium prices are falling globally on the back of oversupply, costlier energy will surely make aluminium production challenging for the primary producers in Egypt.

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