In this memo, we examine the situation of Iran’s steel export markets in the past week. As you are aware, the Iranian steel market, especially the steel export markets, experienced sharp fluctuations last week, and the main reason was the fluctuations of the dollar exchange rate and a significant and sometimes premature drop in the market. However, the color of sanctions has also reduced the size of Iran’s steel export transactions, so that steel exports fell by 13% in the first nine months of the year, but also exceeded 4.7 million tons. In the following, we will examine the Iranian steel export markets in more detail. Please be with Artan Press.
*** Fluctuations in Iranian steel export reports
Reports from the Ministry of Silence show that steel exports have been volatile, declining in some months and rising in others. For example, steel exports in December increased by 35% and reached more than 721,387 tons, but the color of sanctions has also reduced the size of Iran’s steel export transactions so that steel exports in the first 9 months of the year 13% Fell, but also crossed the 4.7 million ton mark.
*** Investigate the distribution of steel exports of companies
But it is necessary to examine the distribution of these exports. It should be noted that of this amount, Khuzestan Steel Company 151 thousand 915 tons, Mobarakeh Steel 124 thousand 737 tons, Kaveh South Steel 117 thousand tons, Isfahan Steel 86 thousand 497 tons, Chadormelo 60 thousand 802 tons, Kavir Steel 53 1,843 tons, Hormozgan Steel 30,804 tons, Jahan Sirjan Steel 30,000 tons, Sabafoolad 29,981 tons, Khorasan Steel 25,831 tons, Bonab Steel 9,205 tons and Iran Alloy Steel 772 tons exported steel کردن.
*** The cumulative volume of Iranian steel exports
Also, during the first 9 months of this year, despite the US multilateral sanctions against the Iranian steel industry, large companies have succeeded in exporting 4,768,047 tons of ingots and various steel products, a figure whose financial dimensions are not clear. But at least we can say that in the worst case scenario, export markets survived and were able to pull steel companies out of losses.
*** The role of the market maker in controlling the domestic steel market
All the signs and evidences indicate that the market maker is trying to somehow maintain the channel of 22 thousand Tomans of the dollar rate; Somehow control the negative emotional atmosphere in the markets; And save domestic industries and the capital market from further losses, in fact, since our economy is purely political and the political developments ahead are currently experiencing their most critical moment; It is safe to say that the roadmap of the markets, including the Iranian steel export market, is currently ambiguous.
*** Withdrawal and cessation of the steel export market
What has been obtained from the statistics and documents of the Ministry of Silence is that in the current situation, the steel export market is currently retreating and the trend in this market is currently declining; We know that the exchange rate coincides with Trump’s departure from the White House; It has been steadily declining until yesterday, and now today the brakes on the downward trend of the currency have been pulled in some way.
*** Steel export market awaits transparency
Now the only possible way is to correctly identify the leading path; In fact, waiting for the positions of both Iran and the United States to be clarified will coincide with the inauguration of the new US administration and the subsequent determination of the task of cowardly sanctions and the extent of possible openings and feedback on our economy and domestic markets. This will also greatly affect the ease of doing business and exporting Iranian steel products, and some reports suggest that Iran could export up to three times its current capacity to global steel markets if sanctions are lifted.
*** Export of rebar; The most optimal current market
Export rate of Iranian ribbed rebar, common type 14 to 25 ribbed A3 with factory door delivery conditions (exw) in the price range of about 535 to 555 dollars / ton can be heard; Whereas the standard for exporters in cross-border markets is sanctions; Exchange of dollar bills is an exchange; Iran’s ribbed rebar is exported at the rate of Rials today, approximately 12,200 Tomans per kilogram, excluding VAT.
*** Rollers’ miscalculation of export markets
This shows a fact, and that is that in the current situation and with a half export rate, the most profit is obtained from the sale of rebar in the export market, and the claim of rollers to sell export ingots is not very consistent with economic calculations these days. Of course, it goes without saying that this is the right of small and medium-sized domestic industries, which are produced at a fair price for raw materials produced with national energy subsidies and cheap labor rights; Enjoy it in the domestic market
*** Iran Steel Market; Involved in self-sanction
Unfortunately, the domestic market does not use the available potentials in the export market, and in a way, we can say that we have witnessed marketing myopia in the Iranian steel market. There are all kinds of market regulation methods, but most of them have been mostly marginalization and escapism; And this shows that the transactions that take place in practice and in our export area regarding steel; In fact, these are not the prices that are sometimes reflected in domestic reports, and even worse, some try to mislead the domestic audience with the wrong address they give on the selling prices of Iran’s neighbors such as the CIS; Persuade them to continue to buy domestically produced products at unrealistic prices.
*** Losses at a fixed rate Long Steel Transactions
The decline in the rate of long steel sections continues due to the heavier exchange rate falling pressure, but the market in the field of pipes and profiles has moved more on a fixed line; In a situation where the dollar rate in the open market has dropped 950 tomans compared to Thursday and reached 22,900 tomans, and the selling rate of dollar banknotes on the national exchange board has dropped by 750 tomans and the figure is 23,100 tomans. Has registered.
*** Falling exchange rates; Fluctuating factor of export markets
The continuation of the fall in the exchange rate has become the source of important changes in all markets of the country these days, including in the country’s steel market, which, of course, started two weeks ago due to lack of consumer demand and disregard for high base stock prices. Steel products continue in the open market. The continuation of this trend and the frustration of supply in the domestic market can transfer the pressure to export markets, which is the best strategy for steelmakers in the current situation.
The fact that long steel products are not traded on the Commodity Exchange can provide a good opportunity for steelmakers to export their products, but these days there are repeated reports of gas and electricity outages in steel mills. The basis for determining the steel policy was that the downstream steel industries intended to offer 60% of the products on the stock exchange to produce ingots, but only 20% of the products were offered on the stock exchange and even the FOB Persian Gulf price was cheaper than that.
*** Stop iron ore exports, the fluctuating factor of the steel export market
In order to support the steel chain and downstream industries, the export of iron ore, concentrate and pellets was allowed only with the permission of the Deputy Minister of Mines and Mining Industries and the payment of duties, and stated that in order to support steel producers and the need to pay attention to Currency supply chain of these products, any export of iron ore, concentrate and pellets will be allowed only if the needs of the country’s steel producers are met.
*** Iron ore risk for steel export markets
If the price of iron ore does not rise, Iran should restrict the supply of iron ore from within the country, because in this situation, only mines that have a large area can be continued, large investments have been made on them and their equipment is related to the previous Has been since the revolution; These mines also make up less than 35% of the country’s total iron ore mines, and with these iron ore prices, we are on the verge of closing 65% of the mines in this area.
Analysts should look at all steel chain issues at the same time, not rejoice at the rise in steel bullion prices in recent months; In fact, it should be examined how much the ancillary costs imposed on the country in this way are higher than the amount of revenues, in this regard, the export of upstream steel chain products to compensate for some of these costs is not considered undesirable.
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