Egypt’s major steel producers reduced their January prices in the local market for the second consecutive month amid modest global cost of raw materials (billet), analyst said.

Ezz steel, the country’s largest steel producer that controls more than 50-percent-stake of steel market, cut rebars prices by around LE540 (approx. $69) per ton since end of November to currently register LE4660 (approx. $595), according to Supply Ministry’s data.

Beshay steel and Solb Misr, which share around 30 percent of the local market have also shaved LE300 and LE350 (approx. $38 and $44.6) off their prices per ton respectively over the above-mentioned period to reach LE4600 (approx. $587) and LE4550 (approx. $581) per ton respectively.

“China’s oversupply of crude steel has dragged down the prices worldwide,” said Ghada Alaa a construction and building materials analyst at Cairo-based investment bank Beltone Financial.

China tops the world in crude steel production that registered 822 million ton in 2014, almost unchanged from the year before, according to the Belgium-based World Steel Association 2015 report.

Despite cutting prices, Egyptian steel makers still have high premium compared to prices in countries that could export to Egypt such as China, Turkey and Ukraine where the rebars cost ranges between $300 and $350 per ton, said Alaa

Alaa added that the country's current lack of US currency has hindered the importers from bringing large amounts of the cheap imported steel in past months, which protect local producers from bigger losses. Egypt's net foreign reserves stood at $16.4 billion by the end of December.

The leading producers have minimized their production capacity by around 40 percent to avoid losses, given the low demand in last year, said Mohamed Hanafy the director of Cairo chamber of metallurgical at Egyptian industrial federation.

“Egypt has an annual production capacity of around nine million ton, in 2015 the factories’ output reached roughly 6.8 million ton,” Hanafy told Ahram Online on Wednesday.

During the first nine months of last year, Ezz Steel reported 14 percent decline in its sales and net loss of LE509 million ($65 million) against LE461 million ($59 million) in the same period of 2014

“We are expecting a rise in demand for building materials ahead of many megaprojects are planned to be launched by the government, but so far announcements are much bigger than what happens on the ground,” Alaa said.

Egypt plans to build 1 million homes for poorer people at a cost of almost $20 billion over the next five years, the housing minister told reuters in December to ease a crunch that has seen slums and unlicensed buildings spread since the 2011 revolt.