The dilemma for the industrial spheres is capital and production, and it has paid the most losses to these areas, because capital seeks for safe havens; production and industry also require long-term prospects. Unfortunately, none of these conditions is up to date as it should not have been or has been denied.
Currently, only certain variables for us are used as the basis for determining the margin for the production of steel products, the rate of “iron scrap” and “demand status
– The domestic demand, which is known today and it has not been promising for government decisions on this area, such as budget increases and development plans, has not yet been heard, according to some reports released this year, with a decline in per capita consumption of steel We are facing …
Now assuming that we reach the bottom of the market; how many Sabahi may see the influx of queues waiting for the floor rate to buy, and no longer, the same day, and the same conditions …
The fact is that the steel market is not a suitable market for speculation, because it is clear that with surpluses we need about 2.5 to 3 times the domestic production of long steel sections in the current state of boycotting (of course, the B coil sheet is no exception. )
Iron scrap, as seen in December, has fallen sharply, so that on Thursday, some of the heard from this area for the best of its kind on the average of the rate of about 2200 USD, reduced by 750 USD only in the last 20 days. And while this decline continues as seen on some of these bases, it continues.
The status and homeowner of the long steel sections are almost now clear; since the dollar bubble has finally been evacuated, and as seen, the currency market maker is apparently surrendering or defeating the government’s control policies. On the other hand, we see that the area of iron scrap has collapsed and by this time it has reached the bottom of 2200, while the relatively less quality ones are traded even to the frontier of 1600 to 1700 tomans
Therefore, assuming that the effective rate of iron scrap is at 2000 Tomans, considering the approximate margin of 1000 to 1200 Toman, which is based on the total index of the steel and rolling products, based on the experience and analysis of the private domain, the rebar index Awning in the domestic market in the range of 3000 to 3400 tomans; a reasonable and balanced expectation in the current market.
Meanwhile, with the returning and declining prices, big and productive steel will suffer the most damage from the attractive margin before, as it is clear in the process of market margin fluctuations, while the private sector or smaller producers Who were struggling with the astronomical prices of iron scrap; major manufacturers with a high level of government-controlled sponge-iron use had far more attractive margins than the private sector.
The monopoly position of supplying hot-plate coil sheet in the domestic market has explained the conditions for the supply chain and supply of this product differently from the rest of the steel products. So that the future of this market will remain the same for as long as there is no operational opt-out on the exit from the monopoly of the supply of this commodity; the experience showed that the order of the rate in the first six months of the year only caused the transfer of rents from the pocket of the first level manufacturer to the second level And the benefit should not be finalized as it should be for the consumer. This dilemma goes back to the government itself, because instead of contemplating increasing the capacity of domestic production to the existing vacuum, it is contemplating the construction or equipping of at least one reliable reciprocating set of hot-plate sheets to eliminate internal deficiencies. ; Only one aspect of the development of the production of semi-built flat gas products has gone.
Steel Reporter
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