Last week, the Iranian steel market went through very inflammatory days. The rise in world prices, the relative rise in the value of the dollar, the prevailing electoral atmosphere in the market and the rising tensions in Iran’s trade and political relations regarding Borjam were the factors that accompanied the analysis of the steel market with shocks. In the following, we will evaluate and analyze the most important issues of the steel market in the past week. Please be with Artan Press.
*** Commodity exchange performance on the last trading day of the week
To analyze the steel market, we will have a look at yesterday’s commodity exchange transactions. Yesterday, taking into account the machining transactions in the commodity exchange, a total of 16,661 tons of ribbed branch rebars out of a total of 134,722 tons of the total supply volume of this product; Or equivalent to about 12.36% of the total volume of this product; With a competitive average weighted rate of 138,591 Rials or about 15,105 Tomans per kilogram, including VAT, VAT was approved. This amount shows an increase of 2.2% or about 305 to 330 Tomans compared to last week’s average trading rate. Steel market analysis shows that the growth rate of prices in all steel markets has stabilized this week. This has caused a great deal of concern for consumers.
*** Steel market analysis in the export sector
In addition to the analysis of the domestic market, it is not bad to have a look at the export markets and reports in this area. In line with the latest changes in the CIS export bullion rate, according to Steel Price daily reports, what is clear from the chart is that the price and destination of the price according to the technical trend is to touch the floor of its long-term bullish action channel. If so, and if fundamental variables allow, analysis of the Sarati steel market indicates a minimum of another $ 5 to $ 10, this decline is likely to continue. It remains to be seen whether this channel can maintain its long-term uptrend or enter a new downtrend.
*** Summary of steel market analysis from a fundamental point of view
An analysis of the steel market fundamentally suggests that a profound correction to the so-called reverse supersycle does not seem very likely at this time. But on the other hand, maintaining this long-term price action channel also seems difficult in the current situation. Therefore, a speculation in this regard could be the beginning of a price action channel with a new angle and possibly suffering for a while. In any case, it is too early to comment at this time, and in the coming days we can undoubtedly better understand the trend. Therefore, it is currently assumed that price growth will remain stabilized cross-sectionally.
*** Outlook for Commodity Exchange retail transactions this week
From another point of view, we must also evaluate the analysis of the steel market from the perspective of retail transactions. In small or small purchases from the commodity exchange; Due to the type of forced arrangement provided by most suppliers in the final product area of long steel sections, no stability situation is observed. Except for one or two companies such as Khorasan or Azerbaijan Steel; In the portfolio of most companies; It is practically impossible to buy with a small volume with this supply basket arrangement.
This type of arrangement can not satisfy the buyer. Therefore, we see that the sizes required by the buyer are less responsive at this scale. Therefore, it seems that for the demand of wisdom; Almost all of these layout baskets are not functional. For example, if the buyer consumes only one size or a maximum of 2 sizes, for example, in a volume of 2 to 4 trucks; Except for one or two companies; The shipment arrangement of most companies can not meet this demand.
*** Forced arrangement of products and misguidance of steel market analysis
This has challenged the forced arrangement of steel market analysis to determine the price range. For example, in many layouts, low-consumption sizes, such as size 22 and above, are imposed on the buyer as part of the basket composition. While in almost all cities; In 4 or 5 floor projects, sizes 25 and above are not used and demanded. Therefore, the major urban and weak demands are not commensurate with this type of basket arrangement. This false demand created in the current situation is a pest of steel market analysis in terms of final price.
*** Failure in the commodity exchange trading path
Apparently on the Commodity Exchange; Despite all the efforts that have been made so far to promote the purchase of micro-demand from this platform; Regardless of price discussion; This platform does not have the ability to provide retail buyers for retail. It seems that this market has not been able to make this important in reality. As a solution, an option could include a premium in terms of sales; In order to be able to change the composition predetermined for the buyer. This issue is also hidden in the analysis of the steel market, and if this method is implemented, we will see a rapid market response in improving prices. For example, it should be mentioned that the buyer can choose his desired size on a small purchase scale, by paying 100 Tomans per kilogram, as a matter of taste.
*** Divergence of domestic prices from the path of logic
As long as domestic rates were below world and export prices; Buying long steel sections from the market could be justified by logic and mathematics compared to export rates. But the story from today onwards market; It is an undefined anecdote that has no logical basis.
In the current situation, the analysis of the steel market with many ifs and buts is in an aura of ambiguity. Because now at least 500 tomans per kilogram of ingots has been imposed on the domestic market higher than the export rate of our steelmakers, and therefore I do not have the support of calculation and logic. This game is like a panzi game or unfortunately one
Gambling game. They can or will not be able to buy even at current rates, and it cannot be said that they will lose because they have been in this game from the beginning and if they add up the profit and loss, they will eventually reach the balance of income and expenditure.
*** Steel market analysis and investment risk assessment
The analysis of the steel market is evaluated from the perspective of the possibility of entering the form of investment in the current market with high risk. We do not have time at this point unless they are real consumers and their project is lame, which makes a difference. Some people have calculated the market prices of steel at $ 23 justified. In response to these nobles; We calculated the raw materials of the steelmakers, ie iron scrap, last night at $ 20,300, which was exactly equal to the price of Turkish iron scrap. These factories are obliged to return the major foreign exchange earned from exports to the Nima system at the rate of Nima half remittance.
*** The recurring theme of the rampant rise in steel prices
The scenario in the steel market arises from the analysis of the steel market in recent years and is not a new issue. This behavior, this scenario, and this mood are quite familiar to us, and we have been familiar with their origins for years; They have invaded quite brutally until the brakes are pulled. It does not need much reason and explanation. All the issues that have occurred are proof of this. Overall, the analysis of the current trend in the steel market shows that the situation is not suitable for the investment perspective. We only cautiously advise the construction and production activists to be active in the market.
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