Wednesday,19 June, 2019
Current issue | Issue 1424, (3 - 9 JANUARY 2019)
Wednesday,19 June, 2019
Issue 1424, (3 - 9 JANUARY 2019)

Ahram Weekly

The importance of scrap

The government has extended a decision to impose export duties on scrap metal to help local industries, reports Safeya Mounir

The importance of scrap
The importance of scrap

Minister of Trade and Industry Amr Nassar has issued a decision to extend custom duties on exported scrap metals, paper waste and ores for an additional year.

According to the decision, custom duties will be extended on different forms of semi-processed copper and copper scrap of LE20,000 per ton. Scrap and crude copper exports reached 125 tons during the first 10 months of 2018, down from 427 tons in 2015.

“The decision aims to make material available to factories that use scrap and to limit imports,” said Tarek Al-Giosh, a member of the Metal Industries Chamber.

Nassar’s decision also imposes duties of LE1,300 per ton on iron and steel scrap, LE7,000 on aluminium scrap, LE3,600 on paper waste and LE6,000 on lead products. 

Egypt’s imports of lead scrap reached 3,700 tons in the first 10 months of 2018, down from around 10,000 tons in 2015. Iron and stainless-steel imports reached 7,400 tons during the first 10 months of 2018, in comparison to around 13,000 tons in 2017. 

Cardboard and paper waste imports stood at 55,000 tons in the first 10 months of 2018, down from 151,000 tons in 2015.

Mohamed Hanafi, head of the Metal Industries Chamber at the Federation of Egyptian Industries, said the Ministry of Trade and Industry had consulted with the chamber before issuing its decision.

The chamber had requested the continuation of custom duties, with fees on zinc being reduced by LE400 per ton, he added.

Hanafi said the reason the custom duties had been extended for an additional year was owing to the shortage of metal in Egypt. Most metal ores are imported, he added, and it is better to conserve any scrap to recycle into finished products than to export it, he said.

The appreciation of the dollar against the Egyptian pound had led to the increase in custom duties on crude metals, Hanafi stated. Custom duties on copper and iron stood at LE2,000 and LE500 per ton, respectively, two years ago. Today, they have reached LE20,000 and LE1,300.

Even if Egypt did not export scrap metal, it would still need to import it, Hanafi stressed. The local market imports three million tons of metal annually and exports no more than 200,000 tons, he added.

The scrap metal comes from old vehicles and waste from factories.

The Ministry of Trade’s decision aims at encouraging local industries by making available what is needed for local production and maintaining the domestic inventory of scrap metal and paper waste, said Amany Al-Wassal, head of the Trade Agreements and Foreign Trade Sector at the ministry.

Scrap metal makes up for the shortage of basic ores for many industries, and it is cheaper than such ores, Al-Wassal said. 

She added that the decision had been made after analysing imports data released by the General Organisation for Export and Import Control and consulting with the Metal Industries Chamber, the Engineering Industries Chamber, the Chemical Industries Chamber and the Chemical and Fertilisers Export Council. 

Effective upon publication in the Official Gazette, the decision excludes materials transported to project sites in Egypt’s free zones as long as their quantities are agreed upon by the General Authority for Investment and Free Zones.

Head of the Printing Industries Chamber at the Federation of Egyptian Industries Ahmed Gaber said the decision to extend the custom duties was based on his chamber’s request. 

Paper waste is difficult to import since few countries export it, he said. Egypt exports a ton of paper waste at $400, whereas it is imported for $1,200 and sold to local factories for $1,500, he said.

The writer is a freelance journalist.

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