In recent days, we have seen domestic steel prices overtake export prices and world steel prices. This has happened at a time when global rates are almost stable. On the other hand, there is a possibility of falling prices in the world market. Under these conditions, the Iranian steel market and export prices do not converge. In the following, we will evaluate this issue. Please be with Artan Press.
*** Evaluate steel prices and future domestic market roadmap
We will examine the price assessment of domestic steel affected by the exchange rate. Yesterday, while the price of the dollar returned to the channel of 23 thousand and decreased by 620 tomans, it was sold at the price of 23 thousand and 730 tomans. News from the iron market indicates that prices will continue to stabilize.
These conditions are referred to in the market as price sticking to the ceiling. Unfortunately, this price stickiness has led to an unimaginable downturn in the steel market. Of course, some downside alarms are also seen in the market, and few companies have reduced the price of their rebars, angles and studs. However, due to the price of commodity exchange ingots, resistance is reduced against the price. It remains to be seen when this trend of price fluctuations will lead to stability.
*** Evaluation of domestic and export steel prices
But it is not bad to have a look at the prices in the world market. Global markets are relatively stable due to the price of raw materials. In world markets, raw material prices in China have risen again, and the Chinese government has announced that it is stepping up its efforts to control the market. Although most experts believe that the Chinese government’s efforts will not be fruitful, the Vienna talks have been postponed to mid-July, as domestic bullion approaches the price of export bullion and a severe recession has hit the market. Due to the transition period, the market will experience a heavier recession.
*** Monitoring the price of Iranian steel and evaluating the level of transactions
Yesterday, the observation of domestic markets in the section of long steel sections shows that in the rebar market, we saw maximum price stability. Only 3 companies had a reduction of 40 to 100 Tomans. Golestan Steel Rolling Company has the highest price with a price of 15,800 Tomans and the price floor has stopped at 15,100 Tomans in Kian Steel Abhar Company.
Domestic steel price assessments show that the price trend is out of the traditional logic and calculations of the market. Corners and studs, for example, were offered in the open market with stable price in most points of sale, and the two companies had a decrease of 200 Tomans. The price of beams in the market this week was fixed and only a decrease of 20,000 Tomans was seen in one of the heavy branches.
*** The general approach of countries in raising domestic steel prices
But is the rise in domestic prices from export rates aimed only at the Iranian market? The answer is that this has happened in some steel-producing countries. For example, in connection with the peak of the price of bloom ingots in the commodity exchange and its price exceeding the export ingots of Iran, this has happened in some other countries as well. India is witnessing this claim.
India has been out of steel production and exports since late April and throughout May, and these industries were involved in supplying oxygen to patients with Covid-19, and the outbreak was so severe that the Indian government forced steelmakers to evacuate parts of the plant for treatment. Kurdish patients. China has also systematically controlled domestic prices. If the price spring in the Chinese domestic market is released, we will see the growth of prices in this country in an unimaginable way.
*** Rising domestic steel prices in neighboring countries
Regarding the growth of domestic prices compared to exports in the markets of the Persian Gulf and some CIS countries, something has happened in Iran. For the article, ticket prices in the Persian Gulf countries and Turkey in export and domestic markets have risen in recent weeks, and sometimes we see domestic prices outperforming export prices. The high price of ingots compared to export prices is not a problem and it is true that rollers have protested. But this is happening in many countries. Naturally, steelmakers try to emulate some other countries, but this is not a new case. At present, China’s export market is unsuitable and billet prices have fallen, although slabs are still in high demand.
*** The impact of exchange rates on the domestic steel market
The orientation of expectations in the commodity markets centered on steel has often been through the fluctuation of the free exchange rate, which is now at high levels and the possibility of its growth should not be considered; Thus, the potential for subconscious inflation expectations to increase is further reduced and sometimes marginalized. The above is the relatively real face of the steel market in terms of price expectations, and the real weakness of the demand for speculation and intermediation will cause the cost of production to have the greatest impact on the market and the price discovered.
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