Regulatory pricing in the steel trading market has become an issue that has become the biggest trading challenge of the commodity exchange. In addition to the severe downturn in transactions, this severely leads to the level of cost prices of other products in the open market. Therefore, in the current situation, we are facing a chaotic stock market with no prospects at the macro level. Until the order manipulations in the commodity exchange enter, it is not possible to determine a definite direction for the market, so this factor has caused the disruption of the steel market these days. Please stay with Artan Press until the end.
First of all, let’s take a look at the changes in the profitability of financial markets. Where world prices for oil and metals have risen sharply to $ 26,000, parallel markets are volatile and in recession, commodity prices have risen sharply and corporate profitability is in excellent shape in the first nine months of the year. has it.
Now the question arises that in these circumstances, a stock exchange with normal behavior should be on the path of growth. In these circumstances, it does not make sense for the stock market to fall like this. This happened two more times in the current TB, and despite the rise in world gold prices, unfortunately, the commodity exchange market behaved differently.
*** The false excitement of the stock market
When the stock market is run on the basis of false emotions, the result will be nothing but wasting these opportunities and, in some cases, the mistakes of expert analysts. Unfortunately, in this situation, the market will be oriented based on news. Definitely a non-economic factor is causing the stock market to fall, which is also offering uninterrupted supply. For this offer, each time, there is a reason for the possibility of war and the economic consequences of the corona, and now the ministers’ goldsmith’s lawsuit is the basis of the offer.
Given the conditions of sanctions and exchange rate fluctuations in recent years, the government has made extensive interventions to regulate the country’s steel market. Government intervention to regulate the steel market has been mainly through the market regulation headquarters and the issuance of various letters and instructions that the set of government market regulation policies has not benefited the final consumers of goods (people) and has caused rents, corruption and There has been a boom in intermediation in the market.
*** The position of the Minister of Industry regarding the supply outside the commodity exchange
Regarding the position of the Minister of Industry regarding the supply out of the commodity exchange, mentioning a few points will not be without merit. The first and clearest thing is that it is clear that this insistence, if implemented, will be nothing but a rent, and the performance of the current minister will certainly face criticism in the next government. The other front is also active inside the stock market and offers unabashedly. This tactic has worked for now, and in disbelief has made any partial return to the market impossible.
Considering the study of steel consumption in Iran, it shows that the apparent consumption of steel in 1398 was in the range of 15 to 16 million tons, while unofficial estimates show the actual consumption of the country is 12 to 14 million tons. Taking into account the country’s macroeconomic indicators, sanctions and the spread of the Corona virus, it is predicted that in 1399, the country’s steel consumption will be the same as in 1398.
*** Challenges of Iran Steel Chain
In the current situation of the Iranian stock market, it is facing risks that can worsen the supply trend. Iran’s steel chain faces several challenges, including chain imbalances, ambiguity in the implementation of steel industry development plans, backwardness in mineral exploration and the challenge of raw material supply, and the lack of comprehensive statistical and information systems in the steel chain.
In order to improve the supply and demand situation in the commodity exchange, decisions have been taken by the industry and mining commissions. For example, the need for integration in the steel chain is an issue that has been addressed recently. Any steel policy and decision-making must involve the entire chain. In the first four months of 1999, the export of various types of steel sections decreased significantly. The major part of steel exports in 1998 is dedicated to the export of Shams products, which have a low added value compared to the final products.
*** The purpose of the commodity exchange is to organize the steel market
Commodity exchange was set up with the aim of regulating the steel market with new policies in the twelfth government, but since the establishment of the Iran Commodity Exchange, it has been decided to discover the fair price of steel products in the Commodity Exchange. This market has been associated with challenges since the beginning of the government. The price difference between the free market and the stock exchange, the lack of transparency in the major part of the market, the lack of follow-up on the implementation of the decisions of the decision-making authorities, the failure to deal with the violations are some of the damages that have taken the stock exchange out of its normal path.
But if we want to determine the outlook for the Commodity Exchange for the end of the year, we must say that the government is still working on the record of the stock exchange and somehow the government is not done with the stock exchange, and in my opinion when the time comes, for example after Special circumstances or every other day, the ministers ‘goldsmiths’ fight will end, orders and supportive gestures will arrive and the stock market will be on the growth trajectory again, but this time, even if the price multiplies, no one will be on the bubble drum.
*** Fundamental and price reform of the stock market
The fundamental and price correction of the stock market is long overdue, and most of the losses are merely a manipulation of the stock market and have no other title. Our purpose of these terms is not to provide Signa, but merely to inform and clarify the terms of the scholarship and the course of the past of this market. Experience has shown that such conditions do not last long, and all buyers these days will benefit after the excitement.
With the stagnation of hair markets It is not possible to make a profit from parallel markets, and withdrawing money from the stock exchange with the intention of investing in real estate, cars, etc. to compensate for the devaluation of your investment is very risky. Many analysts are tired of this stagnant and depleting market, and we believe that the overall market trend is likely to change.
*** ۱۵ years of experience of Iran Stock Exchange
Looking at the 15-year past of the Iran Stock Exchange, when we are in scenarios similar to the current situation, the trend of declines and stagnation of the commodity exchange market has not continued and in a short period of time, the market has returned to its growth path. The supply of products in the commodity exchange is in line with transparency and creating justice in the country’s economy, and orderly interventions in this field, in addition to creating rents, reduce the profit margins of companies and damage trust in the capital market.
The majority of these companies that offer their products on the commodity exchange are companies whose shares are traded on the stock exchange and are also among the justice stock companies. Thus, every decision in this area affects a large number of shareholders. In addition, the country’s experience in orderly pricing of goods over the past years shows that this approach has only resulted in rent for producers and consumers.
*** What is the philosophy of forming a commodity exchange?
According to Article 18 of the Law on the Development of Financial Instruments and Institutions, “the government is obliged to exclude listed goods from the pricing system.” The Islamic Consultative Assembly will follow up on this issue with the Ministry of Silence in order to implement the law. Many economic activists, amid the struggles of the Ministry of Economy and Silence, believe that the price of steel has an impact on the cheapening of important items such as cars. If order pricing is to be done, what is the Commodity Exchange for? What is the philosophy of commodity exchange?
Whenever pricing is ordered and out of the market, the two main losers are the consumer, the producer. About two weeks ago, we saw an increase in the price of steel in the country, which provoked a reaction from MPs. Representatives of the people protested against this price increase and referred to the promise of Minister Samat to reduce the price of steel below 10 thousand Tomans.
The harsh words of the representative of the Commodity Exchange and the annoyance of the Minister of Silence and the deputies of the Ministry eventually caused the scholarships to be expelled from the decision-making session for steel. The Minister of Industry acknowledged at the meeting that in coordination with the country’s inspection organization, it was decided that the pricing of steel ingots should be entirely the responsibility of the Ministry of Silence and the institutions under its supervision.
*** The effect of steel prices on the value of equity stocks
The problem of the steel market cannot be solved by orderly pricing and pressure. Most of the shareholders of steel companies are justice stockholders who have trusted and invested in the capital market. With over 60 million shareholders in these companies, any decision about economic variables and prices affects the profitability of companies. Therefore, extreme care must be taken in this area.
Due to the special subsidies provided to steel companies, steel should not be sold at high prices and off-exchange. Steelmakers have been receiving free energy, cheap iron ore, favorable foreign currency loans and government subsidies for years, but they sell their steel at market prices at world prices.
*** The government is reluctant to order steel pricing
Steel produced at a price of less than 4 thousand tomans has been sold at a price above 10 thousand tomans, and this significant price difference has gone to the pockets of brokers and activists in the field of steel, while subsidies should be allocated and distributed among the people in this field. . They believe that this government subsidy should be distributed among all people by maintaining the production chain and reducing the prices of cars, home appliances, etc.
Evidence shows that the government is reluctant to order steel pricing, and so the real profits from production go to steel companies and shareholders. Parliamentary studies and consultations with the Ministry of Silence indicate that the order price of steel is problematic for artisans and consumers, and that the commodity exchange, that is, the actual supply and demand of the market, is to be the criterion for prices. In the current situation, the only possible solution to control the steel market and return it to its normal cycle is to supply all the steel produced by the factories in the commodity exchange so that the prices come closer to reality.
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