Egypt Steel Market Analysis 2026: Currency Crisis, Construction, and Renewable Energy Impact – News and Statistics

Jul 17, 2026

According to a report by GMK Center, the Egyptian pound experienced a sharp depreciation, moving from an exchange rate of 15.7 Egyptian pounds per US dollar in 2022 to 47 pounds per dollar in 2025. To address the resulting currency crisis, the government sought assistance from the International Monetary Fund. In return for loans totaling $8 billion, the authorities agreed to a significant increase in public spending, which became the primary driver of steel sales.

Steel Consumption and Key Sectors

Flat steel products represent only 18 to 22 percent of total consumption in Egypt. The country’s industry is centered on the assembly of household appliances, minibuses, and commercial vehicles. While this sector is growing slowly due to government localization programs, it has not yet matched the construction sector as a major driver of steel demand. Demand for flat steel is being propelled by the wind energy sector. The year 2025 was a breakthrough, with 808 megawatts of new wind farms commissioned, largely due to the 650-megawatt Red Sea Wind Energy project in the Gulf of Suez. Steel consumption per megawatt is approximately 100 to 120 tonnes, primarily thick plate for turbine towers and heavy reinforcing bars for foundations.

Construction accounts for 78 to 82 percent of the nation’s total steel consumption. The 2022 devaluation and the Central Bank of Egypt’s policy rate increase from 8.25 percent to 16.25 percent caused a sharp slowdown in the sector. Financing new construction projects through loans became prohibitively expensive for both businesses and the government. State funding is crucial, as infrastructure makes up 53 percent of all current construction work. Infrastructure projects valued at over $30 million collectively account for 34.5 percent of the total market volume, including notable irrigation system developments in the south, such as New Toshka and Sharq El Owainat. Residential construction represents 34 percent of this volume.

Major Players and Projects

The largest consumers of rolled steel are property developers, including the state-owned corporation Arab Contractors, state-owned companies Main Development Company and City Edge Developments, and private construction holding firms Orascom Construction, Hassan Allam, Dorra, and SIAC. The 2024 devaluation did not hit the construction sector as severely as the 2022 event, even though the CBE raised its policy rate to a record 27.25 percent. By then, the flagship New Administrative Capital project had moved to interior finishing. The sector remained afloat, generating steady demand.

A key support came from a government agreement with the UAE’s sovereign wealth fund ADQ to build the city of Ras El Hekma on the Mediterranean coast. The total area will exceed 170 square kilometers, making it twice the size of Barcelona. The first district, Wadi Yemm, covering 50 square kilometers, is currently under construction. Once completed, the city is projected to attract 8 million tourists annually and will be a year-round smart and environmentally sustainable metropolis. Construction costs are estimated at $110 billion, with $35 billion in direct investment from ADQ. The project includes a high-speed railway line to Cairo.

Despite the currency crisis, the government increased budgetary investment in construction by 82 percent in 2025, reaching $790 million, though these figures are far from historical levels. New loans were secured from the European Bank for Reconstruction and Development, the African Development Bank, and the International Finance Corporation, leading to the resumption of work under the New Urban Communities Administration program. NUCA aims to relieve the overpopulated Nile Delta by relocating people to the desert and coast, with plans for 40 smart 4G cities. Fourteen are under construction, including the New Administrative Capital, all built to a standard of 100 percent digital governance, smart energy grids, mandatory renewable energy, and environmental sustainability.

Among these, New Alamein is a year-round metropolis with a population of 3 million, serving as the administrative, educational, and business center of the Mediterranean coast. Covering over 200 square kilometers, it houses the Egyptian President’s summer residence, the Cabinet building, government offices, three international universities, a library, an opera house, and a History Museum. These facilities, along with 25 residential skyscrapers over 40 stories high, are part of the fully completed first phase. Work continues on the second and third phases, including the Latin Quarter. Ras El Hekma will be located next to New Alamein but is not part of NUCA, with its parameters set in an intergovernmental agreement between Egypt and the UAE.

Industrial and Infrastructure Developments

The gradual increase in localization is expected to encourage household appliance and bus assembly plants to manufacture more components in Egypt, paving the way for higher demand for flat steel products. This demand is likely to be fully met by Ezz Steel’s new production capacity. At the end of April 2026, the Shangyuan steel structures plant opened in Ain Sokhna, specializing in trusses, scaffolding, power line pylons, and bridge spans, with a capacity of 15,000 tonnes per year. In March, Massoud Steel began producing steel containers in the same area.

The government has ambitious renewable energy plans for 2026, with 2.5 gigawatts of new wind and solar capacity expected online. The flagship project is the construction of the world’s largest offshore wind farm, Ras Shokeir (900 megawatts), by the French group ENGIE. The bulk of flat steel and reinforcing bars for this project will be supplied in the second half of 2026. This supports a forecast of a 1.8 percent increase in flat steel consumption by the end of 2026, to 2.85 million tonnes.

For the 2026-2027 financial years, the Egyptian government, at the IMF’s request, has frozen direct budgetary allocations for new city construction. However, construction has not stopped. NUCA will finance completion through land plot sales to private developers and completed property sales on the northern coast. Over the last two financial years, transaction values reached $24 billion. Industrial construction will help sustain steel demand, primarily from the expansion of the Chinese state-owned corporation CNCEC. Its main project is the Red Sea Petrochemicals plant in Ain Sokhna, valued at $1.7 billion. CNCEC has also secured contracts for soda ash and metallurgical silicon plants. To avoid transporting steel structures from China, the corporation signed a contract in January 2026 to build a $34 million steel structure plant in the SCZone, with an annual capacity of 20,000 tonnes, supplied by local steelworks. CNCEC also plans a $250 million steel tank manufacturing plant for soda ash and silicon production.

Other major industrial projects are underway, and all except Canal Sugar will generate demand for flat steel products once completed. Construction in this sector continues even during Ramadan, ensuring stable supply for traders and steelworks. Demand for long-length rolled steel will be supported by infrastructure development, notably the construction of three high-speed railway lines for passenger transport by a consortium of Arab Contractors, Orascom Construction, and Siemens Mobility. Work is active on Line 1, stretching 660 kilometers from Ain Sokhna to Mersa Matruh, with track laying completed on 130 kilometers and station complexes and 58 bridges and viaducts 70 percent complete. On Line 2, from October City to Abu Simbel, spanning 1,100 kilometers, infrastructure works are approximately 40 percent complete.

Cuts to state funding at the IMF’s request will negatively impact work pace and steel consumption. By the end of 2026, demand for long steel products is forecast to fall by 3.5 percent, to 5.5 million tonnes. Overall, finished steel consumption in Egypt is expected to decline by 1.8 percent, to 8.35 million tonnes.