The steel market last week faced the repeated challenge of canceling steel ingot transactions. In a strange move, the Commodity Exchange did not approve any of the steel bullion trades.
*** Pre-receipt of steel deal decreased
The Commodity Exchange on 10 September, while the foreign exchange market was once again inflamed, reduced its advance in steel trading from 50% to 20%, which paved the way for increased demand for steel ingots in the Commodity Exchange, resulting in emotional competition. . This emotional competition and rising prices on September 4, led to the cancellation of bullion trading by the Commodity Exchange. The Commodity Exchange on Wednesday last week withdrew from announcing a reduction in the advance on steel trades from 50% to 20% and announced that it would increase the advance on 50% again from Saturday, September 6th. The Commodity Exchange also announced that it will hold compensatory supply of steel ingots on Saturday, September 6th.
*** Cancellation of transactions continues
Inflation in the steel market has increased with each use of the cancellation tool. The cancellation of transactions took place last week, while in July of this year, the Iranian Steel Producers Association wrote a letter to the CEO of the Iran Commodity Exchange, requesting the abandonment of the procedure for canceling steel transactions in the Commodity Exchange. In a letter to the CEO of the Iran Commodity Exchange, the Iranian Steel Producers Association described the cancellation of steel transactions as “a wasteful procedure” and “inflammatory” due to “non-compliance with the policy ceiling set by policymakers.” And also damage the supply factories (ingot producers).
In an important letter to the CEO of the Iran Commodity Exchange, the Steel Association wrote: “Cancellation of transactions, especially in intermediate products such as ingots, is a wasteful procedure, whether for a consumer factory that loses its ability to supply raw materials or for a supplier factory that “Planning for production and liquidity and selling it is disruptive, both for the government and the commodity exchange, which have been forced to control price orders, while the consequences of this will be reversed in the long run due to increased demand in subsequent supplies.”
*** Steel development continues
The good news of the steel industry last week was the overhaul of the development plan of Amirkabir Kashan Steel Company (symbol of the Fajr Stock Exchange), which was attended by Khodadad Gharibpour, CEO of Imidro, and Hamid Reza Azimian, CEO of Mobarakeh Steel Company. The total foreign exchange and Rial investment of Kashan Amirkabir Steel Company development plan is 12 million Euros and 3700 billion Rials, respectively. This development plan includes the construction of a cold rolling line with a capacity of 250,000 tons (increasing rolling to 500,000 tons per year), the development of an acid washing line with a capacity of 500,000 tons per year and the construction of a grinding workshop and preparation of rolling rollers. The amount of direct and indirect employment of this project is 1080 people and it is supposed to be done in 24 months.
Among the manufacturers of galvanized sheets in the country, the best quality is related to Amir Kabir Kashan Steel Company. The main infrastructure of Amirkabir Kashan Steel Development Project is Mobarakeh Steel Hot Rolling Project No. 2. It is worth mentioning that the financing of Amirkabir Kashan Steel Development Project is done from the capital increase of Mobarakeh Steel and there is no problem in financing this project.
*** The positive growth of “Fakhuz” continues
The best steel symbol of the stock market last week should be considered “Fakhuz”. Last week, shareholders left behind nightmarish trading days, and by any measure, the fall in stock market prices has become too deep and prolonged. For this reason, the Fakhuz symbol was selected as the best steel symbol last week, which had a positive return in total last week. In the last 3 working days of the week, the Fakhuz symbol experienced a growth of 3.7%.
*** Steel supplies in the commodity exchange
In the past week, 151,732 tons of various steel products were traded on the commodity exchange. The total value of steel products transactions in the commodity exchange last week was 1539 billion tomans. Last week, Mobarakeh Steel earned 455 billion Tomans from the sale of its products on the Commodity Exchange. Of all the steel companies, Mobarakeh Steel had the highest sales value of its products on the Commodity Exchange last week.
Cancellation of steel transactions by the Commodity Exchange is a costly and inflammatory procedure for everyone. This action, on the one hand, damages the factories that consume steel ingots (rollers) and, on the other hand, damages the units that supply ingots; Therefore, those in charge of this field are asked to reconsider this strange policy.
*** Wrong strategy, accused of steel market disorder
The price of steel products has been growing at an unprecedented rate in recent months. Because the selling price of steel products has a significant impact on the cost of building, this price increase has been considered more than expected. Of course, in addition to the hardware sales rate, several other factors are contributing to this price growth, but the role of steel in this growing trend cannot be ignored.
Unprecedented growth in the exchange rate is cited as another major reason for rising steel prices; As the country’s economy faces instability, there is room for rising prices for many commodities. Meanwhile, steel has also become a commodity of capital and has entered the sphere of price growth. Of course, sales of steel and steel products have risen much faster than the dollar in recent months. Adoption of wrong strategies by government officials has been another factor in exacerbating the inflammation of the steel market. It seems that wherever the government intends to organize Imported affairs have provided the ground for price growth.
*** Rising prices of rebar, beams and other construction hardware
In such circumstances, the supply of steel ingots in the commodity exchange has also decreased. Undoubtedly, this decline has paved the way for the growth of prices of rebar, beams and other construction hardware.
Due to the lack of strategy in this market, the activities of producers in these industries have been affected. To the extent that some downstream steel units have been forced to shut down their units or reduce their production capacity.
It is necessary to pay attention to the fact that it is not possible to order the steel market; This means that the steel market should be free, but the supply should be increased to such an extent that producers do not seek intermediaries and the black market to supply the raw materials they need in production. There is no doubt that the growth of supply reduces the inflammation in the market and provides the ground for falling prices.
Unfortunately, in recent months, economic instability in the country has peaked and continued so much that the minds of the people are receptive to this price increase.
In the past, people reacted to price increases; But nowadays, significant growth in the price of steel products has become commonplace. In such a situation, returning stability to the economy is the best option to meet the existing challenges.
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