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[Ferro-Alloys.com] Algerian steel importers have voiced concerns over impending changes to make imports of all goods into the country on a free on board (FOB) basis from December 31.
On September 29, the Algerian finance ministry informed the Algerian association of banks and financial institutions (ABEF) of measures to make imports of mobile phones and household goods on a free on board (FOB) basis. From December 31, the measure will apply to all imports, including steel.
"It's a big mess and people are totally confused - all buyers prefer to import on a CFR basis as it's easy," a steel trader said.
"Importers will be pushed to use a local public company, CNAN [the Algerian national navigation company], and that means they will use the local currency [Algerian dinar] to pay for freight instead of US dollars and euros," the trader said.
"But the thing is, CNAN does not have enough vessels to manage all imports and it does not have enough lines to cover all destinations," he said.
Algerian buyers that booked flat steel cargoes in November, for January delivery, are most concerned, market participants said.
Obstacles to importing finished steel into Algeria have grown in recent years, in line with the development of domestic long steel rolling capacities, with Italian and Spanish long steel exporters most affected by a more protectionist stance adopted by the Algerian government.
"This rule change on imports will be positive for the domestic steel industry," a local Algerian source told Platts.
Algerian buyers imported 203,215 mt of Europe-origin rebar in January-September, up from 149,881 mt over the course of 2018. However, this represents a sharp decline from 857,461 mt imported from EU sellers in 2017 and almost 2.5 million mt in 2016.
"It's a question of mathematics - if you need to import 1 million mt of goods, and you don't have 1 million mt capacity of vessels, how are you supposed to import?" an Italian mill source said.
"Also, this might affect more seasonal goods like cereals, but steel is not seasonal - and the Algerian election might also change things so we will have to see." (S&P Global Platts)
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- [Editor:kangmingfei]
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