The issue that can be seen in the first day of the week in the commodity exchange and in the steel sector is the dullness of the steel market in the commodity exchange and even in the trading. Some believe that the recession has been injected into the steel market and everyone is waiting for lower prices. They are dollars. Of course, the issue of new and revised rules of steel supply in the stock market has also been influential in this market sluggishness. In the following, we will deal with this issue in a more comprehensive manner. Please be with Artan Press.
*** Corrective style of market stagnation
The main and new issue in the country’s steel exchange is the subject of the correction method of steel casting. The procedure approved by the government’s economic headquarters was announced in line with the production leap, and one of the principles of this procedure is the supply of all steel products, including all kinds of ingots and sheets in the commodity exchange. At present, regular meetings are being held for the companies of the country’s steel sector to offer raw materials on the stock exchange; Also, the realization of demand and quotas in the field of sheets has been done in parallel.
*** The behavior of traders in the commodity exchange is logical
Experience has shown that after the implementation of new policies and changes in market strategies and the variety of trading styles in the steel exchange, the risk of entering the market has increased and people who enter the commodity exchange only as short-term investments and sometimes fluctuations. They do not want to enter and test the market. Therefore, in the current situation, the situation of the commodity exchange in the steel sector is in this situation, and this has caused the volume of transactions and even steel matching transactions to be significantly reduced.
*** Lack of acceptance of steel offers of the Commodity Exchange
Considering three consecutive offers in the commodity exchange and the non-acceptance of 50% of the demand, now according to the new method of regulating the country’s steel market, there is a discussion of reducing the coefficient by 5%, if the provisions of the method are to be implemented; This five percent must also be taken into account. This has caused prices to continue falling in the steel market, and given the recent price increases, the steel price bubble is likely to collapse more rapidly. In such circumstances, it makes sense for the market to enter a recession and possibly By the end of this week, the market will be given the green light for the reductions due to this atmosphere.
*** The possibility of deepening the recession of the steel exchange
The above forecast is likely to happen this week, and the argument presented in this section seems logical, but it seems that the issue is seen beyond this 5%, the fall in global prices along with last night’s discussion. The Central Bank and possibly the continuation of the devaluation of the dollar at least to the channel of 22,000 Tomans; These are important issues that we now have to see how the Commodity Exchange will react to this week’s pricing.
*** Transparency; The cause of the steel exchange recession
In general, we can say with certainty that the reduction of prices is in the path of steel and we will most likely experience a 15% price correction in the stock market. The steel policy proposed by the government for the steel industry has required all producers of steel products, from iron ore to final products, to offer their products on the commodity exchange, which has led to differing opinions from activists in this field. Investors in the steel exchange are not a pleasant subject and can even cause a temporary transfer of capital from the commodity exchange.
*** A little review of the recession in the commodity exchange
The base price of Bloom ingots in Wednesday last week was 12,160 tomans per kilo. In last week’s supply, the base price of ingots was 12321 Tomans. The base price of ingots has decreased by 1.3 percent compared to last week. Steel ingots, including the half exchange rate of petrochemical products (USD 25469), are offered at a base price of $ 477 per ton on the Commodity Exchange.
*** Inserting the price of ingots is a factor in stopping steel transactions
The latest price of Iranian export ingots is $ 572.5 and the base price of ingots on the Commodity Exchange is $ 95.5 lower than the price of Iranian export ingots. The last price of CIS ingots was $ 599 and the base price of ingots on the Commodity Exchange was $ 122 lower than that. These prices show that the Iran Potential Exchange has grown towards world prices, but the current situation has caused prices to rise. The main reason is the reduction of the bullion rate in last Wednesday’s trading.
Commodity exchange steel transactions are done with the least possible diligence, and most of the time, in the best cases, we see prices in the commodity exchange. For 4,500 tons of G galvanized sheet traded on the board, the price offered by buyers was the same as the base price of 235,594 Rials. Also, in 101,490 tons of hot-rolled sheet B, in the supply of hot-rolled sheet B of Mobarakeh Steel Factory with 1.41% competition, the price offered by buyers reached 160,113 Rials.
*** The latest steel trading rates on the commodity exchange
Hot plate B of Gilan Steel Complex was traded with the same base price of 157 thousand and 881 Rials. Home appliances also reached the base price of 207,673 rials. The supply of 20,000 tons of iron ore pellets was also faced with a bid price of about half the base price and was not traded, and for the third time, the supply of Ardakan steel smelting pellets was unsuccessful.
*** The need to implement the steel reform method
The manufacturer’s policy requires that if they buy their raw materials from the stock exchange, they must put all their products back on the stock exchange. In this way, the origin and destination of the goods will be completely transparent and the price gap between the ingot and the final product will be clear. Full Manufacturers Association
Steel and steel ingot manufacturers welcome the supply of all products in the commodity exchange. When all the products are offered in the commodity exchange, the interests of some will definitely be jeopardized. Regardless of whether the instructions are good or bad, the law must be fully enforced. Compulsory offering of all products in the commodity exchange may not be to everyone’s liking and may not be a good solution, but not fully implementing the directive and acting selectively is also not a good solution.
*** Steel analysts are concerned about the deepening recession
In a detailed letter to the Chairman of the Parliamentary Committee on Industries and Mines, some steel market analysts, while explaining the shortcomings of the “Sustainable Development and Production of Steel Chain” plan, offered their corrective suggestions to eliminate the shortcomings of this plan. It is worth mentioning that the generals of this plan have recently been approved by the members of parliament.
Subjecting exports to the total supply of production on the commodity exchange, imposing export duties and eliminating tax exemptions will severely limit the country’s steel exports and currency exchange. This action is not justified at all, given that we have more than twice the domestic demand for steel production and the country needs non-oil export currency.
*** Falling dollar prices reduce steel trading
Despite the declining dollar and export rates of steel; It is too early to comment on the current trend of steel prices in the domestic market; Because of the unstable situation of the dollar exchange rate in the country; All of our markets are currently experiencing very sensitive and somewhat unpredictable conditions.
*** Increasing the risk of trading in the commodity exchange
Any political signal or, more precisely, any political comment from the parties involved in Iran and the United States; Can quickly change the direction of the foreign exchange market in our country; Intensify the downward trend or enter the reverse process. But now is the time; There is no time to invade markets, especially the domestic steel market; At present, it seems that adopting a crooked and patient approach, along with patience and observation, is the only way and the most logical reaction of domestic market participants to the current situation to overcome this situation.
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