Egypt EGPC to stay out of bitumen market in 2024

Egypt's state-owned EGPC will stay out of the bitumen market for a second year running as it plans to issue no import tenders in 2024, maintaining a large dent in Mediterranean demand for the road paving product.

EGPC is traditionally a key regional buyer, having imported around 360,000t to its Alexandria terminal in 2022, according to Vortexa. Its absence in 2023 was keenly felt, especially in the east Mediterranean market and among Greek and Turkish exporters.

Egypt's economic and currency woes forced it to cancel a previously awarded January 2023 buy tender, and that signalled a halt to its buying programme. The country's financial problems have shown no signs of abating, with the Egyptian pound's value against the US dollar around half of what it was before March 2022.

Some measures are being taken to help remedy the situation. The Central Bank of Egypt said on 31 December it had auctioned $850mn in denominated treasury bills in a bid to overcome a shortage of dollars, and the government has started selling state assets, including army-owned firms, to Mideast Gulf nations. The latter is a key demand of the IMF, from which Egypt has been seeking a $3bn loan agreement in recent months.

Trading and supply firms that have traditionally supplied EGPC under monthly and quarterly tenders were unsurprised but also concerned by the negative market affect of the firm's decision to stay out of the market for another year. Some received recent indications that there would be no resumption of tenders for several months at least.

An ambitious infrastructure investment drive in recent years pushed Egypt's bitumen cargo imports up, to 359,000t in 2022 from 349,000t in 2021 and 314,000t in 2020. That came despite EGPC's start-up in March 2022 of a bitumen production unit at one of its Suez refineries.

Egypt's absence from the market last year crimped regional bitumen demand, allowing more to be exported beyond the Mediterranean. Northwest Europe imported more than 1mn t in 2023, much more than in previous years. Mediterranean bitumen also ended up in west and South Africa, South America, the US and some went east of Suez.

Egypt's President Abdel Fattah el-Sisi secured a third term as leader in December. While elections are often preceded by a surge in government infrastructure investment, which boosts bitumen and asphalt demand - as was the case in Spain in the first half of 2023 - this has not had the same effect in Egypt.

The country is one of several in Africa whose currencies deteriorated sharply against the dollar in the wake of the Covid-19 pandemic, hampering their ability to import commodities ranging from bitumen to wheat.

By Tom Woodlock and Keyvan Hedvat