Despite the steady growth in the price of iron over the past months, it seems that the market has taken a path of stability in mid-September. As the new government took office and the dollar stabilized at current prices, the chances of controlling the market increased. The aggregate market assessment shows that this week’s rates have slightly retreated from Thursday’s rates. We should not ignore the world market prices and the fall in iron ore prices. In general, market variables have moved towards price stability. The market has also received this strong signal. In the following, we will analyze the situation of the iron market in more detail. Please be with Artan Press.
Iron market situation analysis; Relative stability along with lower prices of some sections
Yesterday, in a situation where the exchange rate has slightly retreated compared to yesterday’s overnight transactions and fluctuations on Thursday, and the dollar was sold at a price of 27 thousand and 840 tomans. News from the iron market indicated relative price stability along with declines in some outlets. It seems that our steel market is becoming more dollarized. Even the news of world markets can not change the situation of the iron market as much as the fluctuations of the dollar exchange rate. However, the dollar has stabilized at higher prices than analysts expected. But this stabilization has given the market a signal that further price increases will not be in place.
*** The relationship between the situation of the iron market and the fall in world prices
The situation of the iron market in the current situation is not unrelated to the issue of falling world prices. Eventually, these fluctuations will sooner or later reach the Iranian market. On the other hand, with the approach of Iranian prices to world markets, the impact of this market has become more and more. Some activists believe that due to the continuing decline in world prices and the situation of the Nima dollar exchange rate this week, we should also see a decrease in base prices in the stock market.
On the other hand, due to the improvement of production conditions and the relative removal of electricity supply restrictions, the supply pressure is also high in the market. This means that the iron ore period in the market is practically over. On the other hand, large companies are forced to increase supply in order to comply with the supply floor and obtain export licenses; These trends have reduced the effect of currency fluctuations in the iron market.
*** Continuation of the energy crisis in the Iranian iron and steel market
But the irony in the iron market is the issue of the energy crisis. In the case of cement, we only identified electricity shortages as a risk. The situation of the iron market in the second half of the year is also affected by the energy market. However, the market horizon will not be long before the market is turbulent again due to the problems of gas supply in the cold season of the year and the significant reduction of sponge iron. Of course, due to the lack of real demand in the market until then, depending on the trend of the dollar and world prices, there is a continuation of price correction with a very low slope, but it should not be overlooked that this situation will probably not remain stable as the dollar rises.
*** Monitor the latest situation of the domestic iron market
It is not bad to follow the situation of the iron market with a little spice of market monitoring. These days, the rebar market is the most marginal market in Iran. Yesterday, 7 rebar companies had a price reduction of 50 to 280 Tomans, and 8 companies announced a stable price. The declining trend of the rebar is slightly significant for analysts. Rebar is a full-fledged representative of the Iranian steel and iron market.
Its trend can show the general situation of the market. It seems that the situation in the iron market is ready for a temporary drop in prices. The rest of the markets were in the same situation. Corners and studs were mostly offered in the market with a decrease of 200 to 450 Tomans and some prices were stable. Beams in the kilo section had a decrease of 300 Tomans with stability and the best-selling branches did not change in price. In terms of profiles, most companies had price stability. In some products, a fluctuation of 100 Tomans was seen
*** Evaluating the Iranian steel market from the perspective of wholesalers
We examine the situation of the steel market from the perspective of wholesalers. Yesterday, 4,06 tons of steel chain products out of 45,883 tons listed in the supply announcement were placed on the board. Which meant that 8.8% of the transaction volume was in demand. This figure is too low for the last month of summer. Yesterday, 506 tons of mixed iron beam baskets were exchanged at the proposed rate equal to the base of 189,000 Rials. Also, 1,127 tons of beams were removed from the board before the start of trading due to lack of demand. It seems that the market is currently rejecting purchases. This situation could lead to steel and iron prices in early October leading to the discovery of the real price. It remains to be seen how successful the government can be in curbing iron and steel market inflammation.
*** Government entry into the market to control iron prices
It seems that the government and the parliament will work together to control the iron and steel market in unison. The Islamic Consultative Assembly insists on reducing the price of cement and construction materials, including iron and steel. Abbas Moqtadaei recently announced that our insistence is being pursued by holding several meetings with the new ministers. Especially the deputy speaker of the parliament, on behalf of the Islamic Consultative Assembly, is following this issue seriously. The parliament does not accept that the prices, which have risen sharply in the past few weeks, will remain the same. We are trying to keep prices fluctuating sharply with the recession of the Twelfth Government. In the new government, the relevant councils should be formed. The situation in the iron market is likely to change in the coming months.
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