Steel rolling field is one of the main parts of Iranian steel in the downstream steel chain. According to the latest news and analysis in this field, the producers of this part of the steel value chain have been associated with problems and challenges that few media This has caused the speed of steel production in Iran to decrease and consequently more costs to be incurred on the production sector. In this note, we will look at some of the challenges steelmakers face in the production process. Please be with Artan Press.
*** Holding meetings to address the challenges of the rolling field
In order to improve the situation of steel production, meetings are held with senior and middle managers of large companies, which are the so-called Iranian steel hub, in order to better meet the challenges. With the presence of Saifullah Amiri to control and review the supply and demand of steel in the Commodity and Market Exchange, it is one of these meetings that has acceptable outputs to date and it is predicted that by implementing the minutes, a positive outlook can be rolled for Steel was conceived next year.
*** Lack of transparency in the steel chain price list
One of the biggest concerns of steel rollers is transparency and the provision of cost lists in the downstream and even mining chains so that better planning can be done to purchase products from them. According to most rollers, there is no will for transparency in the sheet chain. This was even observed in the steel ingot section. Therefore, one of the main requests of rollers is that the distribution of the sheet must be completely transparent. The fact that some people can supply sheets at the government rate and the rest of the market can supply sheets at high prices will take away the competitiveness of Iran’s rolling steel sectors and will affect the steel chain more than before.
*** Commodity exchange exit from the path of transparency
The concern of other rollers and other downstream steel producers is that the commodity exchange can not provide a growth path for sections and lighting workers? Why does the commodity exchange hinder production? Rollers consider these recent events that are taking place in the commodity exchange and in the steel sector as contrary to the Supreme Leader’s orders to strengthen the stock exchange, and in fact, passivity in the stock exchange causes losses and loss of trading incentives for shareholders and investors. They know. Unfortunately, with the weakening of the stock market, many manufacturing sectors will experience fatal shocks, and these shocks will occur more strongly in the rolling sector and longer sections.
*** Non-notification of rolling stock quota
The quota of the entire steel chain of the country, including concentrate, pellets, sponge iron to steel ingots and sheets, has been determined for the year 1400 and has been notified to the steel units. But we are witnessing a situation where the import tariff for sheets less than 5 mm is eliminated. Unfortunately, for various reasons, such as sanctions and rising production costs, uneconomical steel exports on the one hand, and the corona crisis and declining international demand in the steel sector, we have seen a sharp decline in steel exports. This was also evident in the rolling sector, as we saw a sharp drop in demand in the upstream steel sector. Exports have decreased since the beginning of the year and it is better to export surplus ingots
*** Poor reception of purity deals in the rolling sector
Exchange in the steel market is unfortunately an issue that has little speed and justification if it can be considered a great potential for growth and cost reduction. Inducers, for example, must sell their bullion on the commodity exchange and receive sponge iron in return. If this happens, something close to 20% of the additional costs in the steel production sector will be eliminated. These costs can be spent in sectors such as the production of high-quality steel rolling and minimize losses in the steel sector. Therefore, the concern of other rollers is to clean and help reduce the costs of the production sector in the cross-section.
*** Facilitate the purchase of steel sheets for steel rollers
Another demand that rollers have from policymakers in the steel sector is that it be possible for small units to buy sheets on the commodity exchange, provided that the units’ behavior in the field of buying and selling is monitored. The precondition of this plan is that the organizations related to the field of steel should be united. Rollers are now of the opinion that it is not possible for associations to speak with one voice because of conflicts of interest
۲۰% of ingot production and 20% of section production have been exported since the beginning of the year, and due to more added value and job creation, exports should be directed to the bottom of the chain. The Steel Association has lost its legitimacy and civility, but is constantly projecting and accusing rollers.
*** Tax challenge for the rolling field
According to the base rate of ingot supply on the figure of 103,021 Rials; In other words, the rolling mill active in the export market, these days, finally has 10 to 11 percent of competition on the base rate, which now, if we consider the domestic rebar rate, this figure will be much lower.
In other words, regardless of the VAT issue that is not considered for the exporter; Roller in the best case if he buys ingots at the base rate from the commodity exchange, his gross margin will eventually be 20% according to the export rate of ribbed rebar; But if there is competition to buy ingots, his final competition can be 10% higher than the base rate of ingots.
*** Feasibility study of rolling tax elimination for currency exchange
Profit exchange rate differences due to export currency exchange were exempt from tax. Accordingly, the full tax exemption was approved regardless of the amount of the exemption for the goods subject to export. It was also decided that the Tax Administration would issue the relevant circular. It means rolling The work of the private sector with a dollar of about 24,500 Tomans, buy ingots above 11,400 to 11,500 Tomans can not sell its product in border markets because its margin will be below 10%
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