The issue of new pricing practices in the steel chain at the beginning of its activity has not been able to attract the attention of buyers and sellers, and we are witnessing dissatisfaction at the bottom of the iron and steel trading market. In this regard, we have referred to the latest comments of iron and steel market activists and we are following the reasons for the decrease in the attractiveness of steel sector offers. Please stay with Artan Press until the end.
Unfortunately, in the industrial sector, and especially in the steel sector, policies have not been adopted that can keep the steel chain dynamic for a long period of time. If a proper policy is not adopted for the country’s steel industry, a large part of economic activities, including construction, will face many problems. Steel is currently the largest sector of Iran’s industry, which in the acute conditions of sanctions has been able to record a favorable performance in export markets.
*** New method of pricing steel products
In the domestic market, a method for pricing steel products was recently introduced, which has been calculated based on the new half-dollar exchange rate of basic prices of steel products. This change is strongly related to the price of steel ingots, which is in fact the main basis for the production of other steel products such as rebar. He had not and was by no means ready to enter an emotional market.
On the other hand, with the arrival of winter, most market participants expected price adjustments due to reduced demand. Because most of the construction projects in the country are planned and implemented in the first six months of the year and in winter saw a drop in demand We are the final consumer. This issue, along with the decrease in demand, also reduces the tendency of speculators and steel speculators.
*** Causes of sharp growth in prices in the Iranian iron market
Another issue that has caused the sharp rise in prices in the Iranian iron and steel market is the lack of a strong pricing strategy along with transparent supply. Unfortunately, in the current situation, the supply of steel products in the form of machining transactions is a big blow to the Iranian steel market. There is no reason for OTC sales. In principle, OTC sales end up creating rents in the steel chain, which is the case. The country’s steel industry is in trouble. The unbridled prices of steel products in the open market, which are somehow determined by steel producers, should be returned to more appropriate figures under the supervision of the Ministry of Silence, so that we can see relative stability in the iron market.
As mentioned, the new steel pricing method has caused dissatisfaction among buyers. Unfortunately, in this method, as in many of the previous instructions, only the generalities are mentioned and the details are forgotten, and it seems that the market managers want to proceed with the trial and error method during the implementation. This previous practice was applied to the dollar and other basic commodities, which resulted in prices stabilizing in excitement and hurting consumers.
*** Current challenges of the steel chain
Another current challenge of the steel chain is the distribution of steel products on the stock exchange in the form of a basket of commodities. Why does this sales system impose a part of the basket on the consumer who may not need to buy it? The supply of a basket of products in the commodity exchange may not be suitable for various customers in different parts of the country, including Mazandaran province; Because some products may be in a basket, but there is no desire to buy them.
On the other hand, the strong requirement to buy many consumers through the commodity exchange has made trading in the open market more robust. Because the conditions of the commodity exchange are managed in a way that inevitably leads consumers to the free market, and this issue causes the profit margin of the free market to grow and the value chain in the steel exchange to be associated with risks. The condition of the necessity of offering all steel products in the commodity exchange, due to the process of selling products in this physical market, prevents the activity of many activists of the free iron market in the exchange.
*** Rising prices of steel products on the stock exchange
Unfortunately, with the rise in prices of steel products on the stock exchange, many small market participants were eliminated from the market because they do not have the power to compete and buy the supplied baskets. This removal of micro-groups from the market will lead to inflammation and unilateralism of the steel and iron market. Do not have the specified purchase amount.
In the current situation, the price of steel products has become highly dependent on the exchange rate due to the new pricing based on the half dollar. Very small changes in exchange rates can severely affect the direction of prices in the iron and steel market. If the exchange rate declines, the market may adjust. But with the increase in the exchange rate, difficult days are waiting for the buyers and suppliers of steel sections. We hope that with the dollar exchange rate remaining stable and the government properly monitoring the prices of steel products, especially at the origin of manufacturing plants, we will see a stable trend in the prices of hardware in the open market in the next few weeks.
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