The average price for steel products, for example, in the basket of rebar in Burskala, was 3800 tomans in June, which dropped to 3600 tomans in July. The mixing beam, which was sold and traded in June for an average of 3880 USD, dropped by about 300 USD in July, and the reduction for the ingot reached 350 USD. This is due to the relatively similar, but less severe, situation in the polymer products market; prices in this market are trading at a maximum of 5% less than in May, but this change has reached 10% in the steel market.
*** Reduced prices of basic products
The price of the products of the paging group in June was between 8 200 and 9 thousand and 200 USD, whereas in July the prices were in the range of 8 thousand to 8 900 USD. The heavy-duty extrusion polyethylene, which had been emitted in June at a range of 11,300 to 12,500 tomans, fell in July at a maximum of 200 USD, and this reduction for the film’s heavy polyethylene is at worst a loss of 150 USD. The bottled polyethylene terephthalate, which was priced between 13,600 and 13,950 USD in June, hit a sluggish price increase in July due to growth in demand. Of course, one should look at the other thing: the high demand in the summer prevented a drop in the price of the product, while at the same time lowering the pace of price growth, which is why, as compared to previous years, this year’s price growth PET bottles are limited.
Experts believe that the drop in the dollar has led to a decline in prices for most basic products in the free market, but for example, in the petrochemical products market, the rise in dollar prices has prevented prices from moving along the free market. This is due to the fact that the “world economy” surveys show that the demand for a variety of basic products in the market is fluctuating. Demand for petrochemical products in the free market and in Borskala is improving in some weeks, but this improvement is not significant compared to standard values and historical averages. What the market for polymer products in a long period of time has shown is trading at 70,000 tonnes a week, while at best, trading volumes in recent weeks will effortlessly reach 40,000, which is far from the average. This is true of the steel market as well. Transactions in this market have also declined significantly due to weaknesses in demand, so prices have been overshadowed by existing realities. One of the things we should not forget about is creating an atmosphere of excitement in the market. Of course, the atmospheric atmosphere is more reasonable and controllable compared to the excitement of the past due to the uncertainty about the sustainability of the current situation. At the moment, although the price of currencies has fluctuated with a slowdown, market participants are not sure that this trend will continue over the medium term, although after a week of noticeable downturn, we are seeing a rise in prices over the past two days. The same thing prevents a long-term performance in the market; in other words, buyers can not safely transfer their purchases to the future like the past, so the current excitement atmosphere is much more controlled and more limited than before.
*** The prospect of boom is downstream
Another important point is that the actual demand has dropped down and the speculators have left the markets, as a result of waiting for the high excitement, which makes the price changes in the market more dependent on real variables, and it is clear that the lack of demand due to stagnation Downstream units have already started in Iran’s industries for a long time, and if they were not intermediaries and the price of the dollar had not risen, then the prices of various steel and petrochemical products were priced at prices between 90 and 91 years. Market participants continue to say that the downside is the dollar’s downturn in the Gulf region facing serious tensions, which has left market participants uncertain about the sustainability of current downturns and their emotional dynamics. .
Unfortunately, the prospects for the boom of the downstream industry are not so bright and secure; otherwise, it would have been hoped that stockpile purchases in the current situation, with a slight drop in prices. Of course, it should be noted that some market participants, referring to the currency market and the government’s attempts to return home currencies to the economic cycle, suspect that the dollar will have a slowing down day, as this market will shorten the currency dealership and cause Owners of home currencies may be coming to the market for fear of further falling prices. This market, meanwhile, facilitates the return of the steel and petrochemicals, metals, and mines exporters, and ultimately it is expected that the market will be in equilibrium and the price of the currency will decrease further. However, we should expect the movement to fluctuate in the coming weeks. Activists in the two steel and petrochemical markets say the current problem is that the two industries are being sanctioned, and there is also a lot of deterrent policy in the steel industry, which is why there should be concern for concern.
If it leads to a further drop in steel prices, if the export is reduced for any reason – as if it has fallen – how will this impact on domestic product accumulation? What effect will the product accumulate on price and production? Of course, there is almost no concern about petrochemicals, because firstly the demand for these products may have fallen, but due to the wide variety and variety of downstream products and products, there is expectation that demand will flourish in the medium term. Another is the growth of oil prices. Oil prices are rising for geopolitical reasons, and some growth predictions, even without any kind of war in the Gulf, confirm that oil is currently in good condition. This factor has a direct impact on the global prices of petrochemicals and, as a result, increases the competitiveness of Iranian products on global markets. Therefore, exports to petrochemical products are certainly better. In addition, the government has no restrictive export policies for its products, as a result of the market, these products are under the pressure of internal and external factors. Under such conditions, the state must provide the conditions for the passage of the activists of these industries from the current state by understanding the state of the industry. In the steel sector, steps have been taken to correct pricing practices for sections as well as steel chains, which, if implemented, can slightly reduce the pressure on the price of these products and bring the steel chain to a fair price. Or the decisions that the government has taken to correct the tax factors of steel makers is another admirable measure for this area. The government may change the tax coefficients of the iron industry from 2.5 to 1.5 for wholesalers and from 3.5 to 3 for retailers as proposed by the union to the tax office. Still, some other policies, including export restrictions, can be problematic.
Reference: Donyaye eghtesad
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