According to the decision of the National Anti-Corona Headquarters, due to the red corona situation in Tehran, this city will be closed for six days. The closure of the capital will have a significant impact on commodity and service markets. A government spokesman has announced that all offices in Tehran and Alborz provinces will be closed from Tuesday this week to Sunday next week. We need to assess this in terms of fluctuations in the domestic steel market. We will deal with this issue in the following.
*** Unnecessary closure and deepening of the recession in the markets
The market does not need to be closed at all in the current situation. Closing commodity markets will not solve any market problems. It may be thought that the markets will shake after the holidays due to the accumulation of demand. But experience has shown that the market in its hidden layers will respond to low market demand. Therefore, this issue can not cure the recession in the steel market. On the other hand, in recent days, we have seen zero demand in the stock market.
The shutdown appears to be aimed at silencing government inaction in the final days of its rule. These events are unprecedented in the history of Iranian industry. We will definitely see inflammation in the free currency market during these holidays. Because such events usually make things difficult for those who are in dire need of currency. This situation can lead to the speculation of the foreign exchange market to make a profit by increasing the price of foreign exchange.
*** Sacrificing the domestic steel market under the pretext of export boom
In the current situation, because the Iranian steelmakers are looking to be 100% focused on the export market, this Capital closure may end in their favor. But this hypothesis will only be true if all steelmakers have access to export markets. We see that in the current situation, the rollers are in a very bad situation. There may be a mentality that focusing on the export market can lead to currency conversion and bring good things to Iran’s steel economy.
But the story is that with the closure of the capital and the closure of domestic markets, we will practically hit the market. Compensation for this damage will take a long time and must be paid from the profits made from international markets to the domestic market. But which steelmaker is ready to take the lead in this direction? That is why it cannot be claimed that closing the domestic market and focusing on export markets can pave the way for a successful course in the steel industry.
*** Closing the economic arteries of the Capital closure and forecasting domestic steel market transactions
Tehran Stock Exchange will be closed in the coming days of the week. This will practically bring a short-term dream to the Iranian economy in the 21st century. The Vice President of the Stock Exchange and Securities Organization has announced the closure of the Stock Exchange Organization at the same time as the six-day closure of banks in Tehran province. Accordingly, the Iranian Capital closure on (Tuesdays, Saturdays and Sundays). As the flow of liquidity in the country decreases, we will most likely see a short-term steel price shock in the commodity markets after the holidays.
But the point to be noted is that the markets in the current situation can not withstand the price increase. Money must be injected into the market. This demand is very obvious. Procrastination in this work will cause the path of stagflation to be very painful for the consumer and the manufacturer. Certainly, the decision to Capital closure under any pretext will be detrimental to Iran’s industrial economy.
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