Gas supplies have been reduced by 30%

The Egyptian government has decided to cut natural gas supplies to a number of the country’s leading steel producers, including Ezz Steel, Suez Steel and Beshay Steel. This was reported by Mesteel.

Gas supplies to these producers have been reduced by 30%. For Ezz Steel, this means a loss of about 30 million cubic feet of gas per day.

The forced move was prompted by a sharp rise in global liquefied natural gas (LNG) prices, which has significantly increased the state’s costs of meeting the country’s energy needs. The cuts are part of a comprehensive government program to manage available gas resources efficiently and reduce consumption amid a widening gap between domestic production and domestic demand.

Earlier, the Egyptian government cut gas supplies to fertilizer and methanol producers by 20% for an indefinite period. In addition, due to high international prices, the country’s authorities were forced to postpone some of the LNG deliveries scheduled for November.

Egypt has set up a permanent committee to monitor the availability and prices of steel billets. The government’s main goal is to resolve the raw material procurement problems faced by re-rolling mills and to ensure the stability of domestic production.

As a reminder, on October 28, European natural gas prices rose above €100/MWh for the first time since the 2022 energy crisis. Prices are climbing to 2022 highs amid the escalation of the conflict in the Middle East and are currently trading about three times higher than before the war with Iran. Disruptions to LNG supplies from the region are causing a shortage of cargoes ahead of winter.

Industry analysts and experts expect high gas prices to persist for at least a year, even if the conflict is resolved and the winter turns out to be mild, as Europe will need to replenish its reserves, which have fallen to record lows.