After a short period of calm in the foreign exchange market, we have witnessed the growth of the dollar price in the Iranian open market in recent days. Exchange rate calm and declining prospects The exchange rate did not last long with the political developments in the country, which gave way to exchange rate fluctuations, and now we decided to interpret and analyze the impact of the exchange rate on steel price equations in the Iranian market. If these two factors are important to you, stay with Artan Press until the end.
*** Factors influencing domestic steel pricing
These days, all eyes are on the two most important and fundamental propositions affecting the domestic steel market; That is, the exchange rate trend and the export rate of this commodity are sewn; Two statements that have a direct impact on the direction of the domestic market. It is natural that a number of supply-side companies were shut down between the two days, which further reduced the supply of suppliers and exacerbated some price volatility, although these fluctuations were not very noticeable.
*** Declining expectations in the steel market
The weakening of the expectations of the Barjami agreements and the clarification of the way forward and the strategy of the new US administration have caused some inflammations in the foreign exchange market. ; Now it remains to be seen whether this demand is deep enough to keep the domestic market warm, or can it only keep the engine of this market warm for a few days ?! Because there has always been enough supply in the domestic market, and with the return of the majority of suppliers to the market next week, we may see a resurgence of supply pressure and the cessation of shallow market efforts.
*** Monitor price changes in the steel market
But the important issue that must be evaluated first is to observe the latest situation of prices in major steel goods as the first role of price acquisition in the steel market. Per kilogram. In last week’s supply, the base price of ingots was 10498 Tomans. The base price of ingots has increased by 3.8% compared to last week. This increase is a factor that can lead to more excitement with exchange rate fluctuations.
*** Evaluate ingots as the main player in the domestic steel market
The point that should be very important is that the price of ingots practically determines the price trend in the whole market. Even the price of ingots can play a role in the pricing process of other industries. Steel ingots are offered at the base price of $ 434 per ton in the commodity exchange, taking into account the half exchange rate of petrochemical products (USD 24689 Tomans). The latest rate of Iranian steel ingots is $ 515 per ton and in the CIS region the latest rate of steel ingots is $ 538 per ton. So at the moment, the rate of ingots can not react to the increase in currency prices.
*** The market has not yet reacted to the exchange rate
At the moment, the market has not reacted to the rise in the exchange rate, as prices have reacted to currency news in the US election last month. In general, there were no significant price changes in the market; A different thing we saw last week; The relative success of the market demand and the limited supply of suppliers in the market
*** Relative stagnation in the domestic steel market
At least half of the population of suppliers in the market today preferred not to announce prices and just watch, or that their sales were limited along with some reduction of discounts or increase in offer price, for example. To determine the percentage of CIS export rate, including VAT, it will increase to a figure around 12200 to 12300 Tomans, which can indicate the floor of the proposed rate of this market.
*** The impact of changing the pricing factor on the market downturn
However, the issue of the 80% coefficient for determining the supply price of ribbed rebar for next week has not been determined yet and may be decided differently at the discretion of the market maker, given that the cash dollar exchange rate in the open market It has grown rapidly and has now reached 25,710 Tomans with an increase of 540 Tomans compared to the evening of two days ago. The selling rate of dollar banknotes on the national exchange board has also been accompanied by a growth of 460 Tomans and this growth can cover all markets. Affect.
*** The impact of the Iranian steel market on political news
Experience has shown that the Iranian steel market is heavily fueled by political news and news of Iran-US interactions, and in practice we are witnessing conditions that can quickly inject false excitement into the Iranian steel market. Many economic analysts, meanwhile, see recent remarks by members of the new US administration’s foreign team team that they will turn Burjam into a platform for further talks as a factor in ending Biden’s optimism, and argue that even if some sanctions are imposed. The negotiations will be canceled on paper, in the end, but there will be no sharp drop in the exchange rate.
*** Optimism about the government’s dollar promise
In addition to the pessimism about the foreign exchange market, some people are happy with the government’s promise of a sharp drop in the exchange rate and have postponed their purchases until the end of the year and after the Eid holiday. However, some believe that after the fluctuations these days The brokers of the dollar exchange rate will return to the descending rails with the release of some blocked foreign currency resources of the country, and the price will probably reach 20 thousand Tomans.
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