The evaluation of the commodity exchange in June has been reported with a noticeable recession due to the increase in world prices on the one hand and the end of the month in the elections in Iran. Due to the rising prices of raw materials in the international market and the imitation of the domestic market, we witnessed the growth of prices to the point that even domestic rates exceeded the imported market. In the following, we will evaluate the latest situation of commodity exchange transactions in June. Please be with Artan Press.
*** Commodity exchange evaluation at a glance
The evaluation of the commodity exchange last week is almost a summary of all the events that took place in June. The reason for this is the low activity of traders. Last week, as with everything that happened during June, a small number of bids were registered on the Commodity Exchange. The highest intensity of competition among the examined products was related to medium beams and the average closing price of its transactions was about 0.9% higher than the average base price of its offers. This slight growth was also met with a reaction from buyers on some days of the month. So much so that on some days of this month we saw the lock of transactions and the lack of customers in the market.
*** Evaluate the commodity exchange from the perspective of demand growth
But the Commodity Exchange evaluation in June had more optimistic points than the whole market. In this regard, among the products offered in the commodity exchange, the demand for precious metal concentrate was higher than the others. For this product, during this week, when demand was recorded about 2.1 times more than its supply, only 40% of its total supply this week ended in a deal. But the market had another day. Slab contraction joints should intersect at the openings for columns and should intersect at the openings for columns. During this week, Khuzestan Steel Company offered 40,000 tons of C slabs in the commodity exchange, which left the ring without demand.
*** Take a look at long steel deals in June
According to the latest evaluation of the Commodity Exchange, the steel sections market is not experiencing a good situation. In recent weeks, we have witnessed a severe recession in the country’s long-distance market. Of course, the downturn in long-term steel trading in the recession began in the last months of last year and has continued to this day. However, the deepening recession in this sector has intensified in recent weeks in the hope of lowering prices after the results of the presidential election are determined.
*** Why the decline in long-term steel transactions
But what is the reason for the decline in long-term transactions? Many consumers in this field are artisans and construction activists. The industry is not profitable in the current situation and current trading rates are able to take advantage of the market.
On the other hand, the consumers of this market have postponed their purchases in the hope of adjusting the prices in the coming weeks, and the existence of this mentality has caused the capital applicants to leave this market as well. In fact, however, long-term steel market free market participants believe that part of the current market downturn is due to a lack of decision-making by consumer and capital buyers. But with the election of a new president and the determination of the economic policies of the new government, there is an expectation that demand will return to the market.
*** Evaluation of the commodity exchange from the perspective of price growth
With the evaluation of domestic and export steel prices in the past year, we are witnessing a significant movement of prices in the steel market. After analyzing and evaluating the commodity exchange in the long resistance section, we take a look at the ingot market in the exchange. Fundamental variables influencing the pricing of ingots and steel products have grown significantly over the past year.
From June of last year until today, the price of Iran FOB Persian Gulf steel export billet has increased by 80% to a price of about $ 640 per ton. This issue has been an effective signal in increasing the price of steel products in the domestic market. Also, the half exchange rate in the week ending June 19 of this year compared to the same period of the previous year has increased by 29.5 percent and the free exchange rate has grown by 30 percent. This could be the beginning of a new price wave in the steel market.
*** Annual and seasonal performance of rebar in commodity exchange
Rebar was offered in the trading ring of Iran Stock Exchange with an average price of 14,000 Tomans per kilogram. The evaluation of the June steel exchange shows a great growth for this subject. At the same time last year, this product had an average base rate of 6,300 tomans per kilogram.
Thus, within a period of one year, the price of rebar in this market grew by 122%. Also, the price of rebar in the open market of Tehran in the week ending June 19 this year reached 15 thousand and 300 tomans per kilogram. This was while the same product in June of last year in the Tehran open market was priced at 7,300 tomans per kilogram, and thus the price of this product experienced a growth of 110% during this period. The evaluation of the Tehran Stock Exchange in the period of June this year shows that this product has moved its previous price ceiling.
*** The influence of international factors in the evaluation of the commodity exchange
Regarding the analysis of the steel exchange last month, one point should be noted, and that is the entry of international factors into the price of domestic steel. Considering that recently our country’s steel market has become a function of global price fluctuations according to the strategic policies applied in the commodity exchange; Some predict that in the medium to long term, rising US Federal Reserve interest rates and, consequently,
other parts of the world, and a change in monetary policy from expansionary to contractionary, will reduce demand for commodities such as gold, oil, steel, and so on. The most important effect will probably be These will be the reduction of world market prices. Of course, the impact of these issues will be conditional on our domestic steel market; That the current control policies of our domestic market, including the dollar exchange rate, do not change significantly.
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