In the days after the three-day holiday and with the opening of the market on Monday, we are witnessing the growth of irrational and expensive prices in the Iranian iron and steel market. This issue slightly contradicts the frameworks of previous years in the run-up to the elections. In the following, we will evaluate this issue and the possibility of stabilizing prices in the vicinity of prices. Please be with Artan Press.
*** Triple the domestic sales price of Expensive steel sheets
The domestic selling price of steel sheets in dollars has increased almost three times compared to last year. The sharp rise in the domestic selling price of steel is due to two factors: the “high and unrealistic price of the dollar” and the “rising global price of steel.” In the currency price shocks of the last 3 years, industrial and mining enterprises, especially steel companies, have priced the selling prices of their products in dollars, and on the other hand, the government has priced the inputs of their production (iron ore, gas, electricity, labor and 2) and their taxes have been kept low and suppressed.
The high and unrealistic price of the dollar, although it brings huge rent benefits to industrial and mining producers, but exacerbates the recession and high prices by having a direct impact on the increase in the price of goods from food to cars and buildings. This is not an issue that can be simply ignored. Unfortunately, rising steel and iron prices will have a direct impact on inflation. At this point, it seems that nothing but false market excitement has fueled this issue.
*** Expensive steel prices and rebar deals
We examine the high prices of steel and iron from the rebar market. According to some rumors from the ribbed rebar market, affected by ingot trading in the commodity exchange; And following the upward trend and announcements of the roof dwellers of this market; Along with the price increase, it has been around 50 to 250 Tomans, which is far from the current pricing mechanisms. Yesterday, during the regular session of Club House, Samat Magazine responded to some of the people who were present on behalf of the steelmakers and their words were based on the issue of raising prices so high that demand retreats and in a way on the health of supply and demand and lack of They believed in the existence of a red line on the ceiling.
It has been stated for some time that analysts have been skeptical about the health of the demand for the Commodity Exchange. Because the events of our domestic market these days clearly confirm this. Therefore, the health of supply and demand can not be promoted. This is very similar to the story of the Qits on the stock exchange in July last year. Continuation of this process will be to the detriment of the consumer.
*** The role of the price of ingots in the Expensive steel
The principles of pricing and high prices of steel and iron originate from ingots. Where the same ingot does not have a buyer in the market with much lower prices, how is it that it is sold in the commodity exchange? It seems that the scenario created in the upward trend of the supply rate of Bloom ingots in the commodity exchange and transactions has been done; Most of it has been done with some pre-arrangements on the demand side and outside the commodity exchange. Therefore, the criterion for the health of supply and demand of the commodity exchange can not be considered.
In fact, this issue can be an important factor in the high price of steel and iron in recent days. Therefore, the inflammatory aspect of this issue is more than the facilitator aspect of the issue. Because of the number of active people in the market, there are ways to circumvent the health of supply and demand. Therefore, at the present time, the market can not be controlled with classical approaches to economics. Unfortunately, rising global prices have also provided an opportunity for further inflammation of the domestic steel market.
*** The threat of Expensive steel for the industrial sector
The issue of high steel prices is a vital issue. If this trend continues, the construction industry can be destroyed. So far, we have witnessed the bankruptcy and ineffectiveness of the construction projects. Therefore, there is a consensus among all analysts that there should be at least one red line in not exceeding world prices in the stock market. While the dollar increased by 300 tomans to 24 thousand and 430 thousand tomans, the price of steel products also increased along with the increase in the exchange rate, so that all rebar companies officially increased the prices by 50 to 300 tomans.
The rate of various types of steel sections, which from the beginning of this week, due to various factors, especially the dollar rate reached more than 24 thousand tomans, witnessed an increase of 500 to 1,200 tomans per kilogram, yesterday (Monday) with the dollar rate returning to 23 thousand tomans in limited cases However, in most items, the price stabilized on Sunday and in some cases increased. According to the previous routine of increasing the prices of steel products on Sunday of this week, most of the companies supplying these items refused to announce the selling prices of their products or announced prices to their customers, which was a significant increase compared to last week.
*** Price growth in the market without iron and steel customers
Yesterday, after the return of the dollar rate to the channel of 23,000 Tomans, although the sharp increase in the price of these products was slower and the increased rate of most of these items stabilized, but the price of some steel sections was still rising. The high price of steel due to the mentioned items will most likely hit the market by the end of the week.
This price fluctuation is in a situation where nothing special has happened in the supply and demand of steel sections and union activists continue to report the continuation of the recession in the non-customer market of steel products. With this trend, trade unions consider factors involved in fluctuations in the prices of steel sections that, like the market of other intermediate goods and capital affected by the country’s economic conditions, especially the influx of stray capital and stimulate profitability of some suppliers, intermediaries and brokers.
*** Rising iron prices Due to the inflammation of the dollar
Due to the high prices of steel and iron in recent days, we have witnessed price movements in the steel and iron markets. This caused the price of each kilogram of rebar in the open market to increase by 1,200 tomans from 13,800 to 15,000 tomans. Of course, the corner and stud market was relatively stable and the price per kilogram of these items increased by an average of 50 to 100 Tomans.
Also, the profile market was relatively calm, unlike other steel sections; But the peak of the dollar increase in the price of steel products in the market of various types of beams was and the best-selling branches of this product grew by 10 to 100 thousand Tomans. According to the latest Metal Bulletin report, the price of Iran’s export ingots was in the range of $ 640 to $ 690, and the trend of increasing the price of steel products in the country’s market was not in line with global markets.
*** Expensive steel prices and warnings to manufacturers
The big steelmakers also have to pull the teeth of greed from the domestic market. They should be very sensitive to the fact that the domestic price of steel in the commodity exchange does not exceed the export rates with the half dollar balance and be careful themselves. The high price of steel and iron can benefit the producer to some extent.
From one place to another, by increasing the cost of raw materials, the smoke will go to the eyes of the manufacturer. Because this type of inflammation and this type of trading and the advance of commodity exchange transactions in stimulating market prices and its distance from market floor rates; Undoubtedly, it will have consequences. Finally, its smoke is due to some extravagances, with the intervention of surveillance sticks and repression that may again fall on this market from the supervisory pillars of the government and the system; It will be visible to all elements of the supply chain.
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