Steel rents have long been a major problem in the industrial economy. The billion-dollar steel rent in Iran has wide dimensions that include all elements of the steel supply chain. Of course, the amount and volume of rents in the steel chain is very different. In this memo, we will discuss the various dimensions of Iran’s billion steel rents and its consequences for the economy and the industrial market. Please be with Artan Press.
*** Billions of steel rents in terms of statistics
If you have heard anything about the billion-dollar steel rent figures, you should know that over 1,400 billion tomans are spent monthly on the steel industry rent cycle. This high amount of wasteful money in the structure of Iran’s steel economy has made other areas related to steel extremely vulnerable. Much of the volume of rents generated occurs in the upstream chain, but we are witnessing the rolling of the rolling field in steel rent issues. Rolling field is one of the most harmful fields and the most oppressed fields in Iranian steel. The damage of grammatical pricing in this area has caused severe losses to rollers. It seems that other steel sectors are trying to mislead the public opinion in the billion-dollar steel rent sector of Iran, and that is why they have targeted the rolling field.
*** The role of ingot pricing in the distribution of steel rents
The price of ingots in the downstream chain is the beginning of the billion-dollar steel rent highway in the Iranian economy. Estimates show that the cost of supplying raw materials to steelmakers is 40% of the cost of ingots, and they make huge profits by using subsidized energy and cheap labor. It has made the private sector unable to compete with governments and steel companies, a question that has occupied the minds of researchers and analysts in economic and industrial markets for years.
*** Triple lawsuit over billion steel rents
Recently, however, the issue of billion-dollar steel rents has been widely discussed among the three main areas. These three lawsuits of the mining, steel and rolling industries have been in the media for some time, and these three sectors are alternately condemning other industries to produce rents. Unfortunately, the issues raised raise the basis and structure of these sections and sometimes insult the dignity and important position of each of them. The fact that these three areas alternately accuse each other of selling on the margins of the market and producing rents and brokerage in the steel market may be a bitter truth, but it does not cure the pain of the current situation in the steel market. The role of market maker and macro-market policymaker is empty.
*** Customer interests are the main shield of rent crisis diversion
But one thing that is not far from the minds of steel market analysts is that in all the talk in these three areas about the causes of the production of billions in steel rents, we will ultimately reach the interests of the customer and the end consumer. It seems that in the comments, the interests of the end consumer have been the main shield to avoid the responsibility of accepting the rent distribution. In fact, they do not hesitate to do anything to achieve their union interests, and in the meantime, the only issue that has never been really considered is what got us here and how the 2,600 Toman rebar and the 3500 Toman profile at the beginning Year 1397; That is, only three years ago; 13,500 Tomans for rebars with 5 times the price and 24,000 Tomans for sheets and profiles with 7 times the price.
*** Forgetting the main causes of billion steel rents
A glance at other markets shows that these fights between chains are in fact fruitless and are in fact the result of forgetfulness and lack of memory and little attention to the basic propositions of the market and economic issues. Whenever we understand what happened to the 1.5 million Toman coin at the beginning of 1397, now with a price of 9.5 million Tomans, we can also recognize the road map of steel and find a way to cure this system.
*** Vulnerability of steel fields to excessive price growth
A look at the current rates of the country’s steel market; Including the rates of sheets, profiles, rebars and other second-hand goods markets affected by the steel market and comparing it with the rate of inflation tells us that this inflation and price increase has rampantly affected all markets, and this sharp rise in prices is practically In recent years, there has been a parallel market for sales and shadow sales by some factories. Unfortunately, during this period, we witnessed several instructions to control the rates in the market, which resulted in nothing but a rent of $ 4,200 and destroyed many of the material and spiritual resources of the industrial sector. The billion-dollar steel rent in Iran stems from weak policy-making in recent years.
*** External risks and rent distribution in Iran’s steel industry
But if we want to examine the issue of billions of steel rents in Iran in terms of external pressures and risks, it should be noted that the reality of the pressure of cowardly and unprecedented US sanctions on the one hand and some weaknesses on the other; Deficiencies and sometimes major thefts in small or large parts; It has been from the economic management of the country, the product of which is now ruined like rubble on the people these days, and the rest of it is a goldsmith’s lawsuit, and giving the wrong address to solve the challenges of the pricing system and discovering rents.
*** Billions of steel rents in the hot plate sector
The price of hot steel sheet of Mobarakeh Steel Company increased by more than 10 times compared to the beginning of the twelfth government to 193420 Rials per kilogram in April 1400, which is 270% higher than the same month last year. Price or cost of producing inputs How much has steel production, including iron ore, gas, electricity and labor, increased in the past year that the selling price of steel should increase 3.7 times? This billion-dollar steel rent has certainly not been used to improve the quality of the final product. In almost all other steel markets, we are witnessing this sharp rise in prices. This is another way of presenting billion-dollar steel rents in terms of macroeconomic indicators.
*** Commodity Exchange; The definitive solution to eliminate billion steel rents
Perhaps the best solution to eliminate the billion-dollar steel rent is to offer all goods on the commodity exchange and expand the stock market in Iran. The current mechanisms of the commodity exchange will greatly contribute to the discovery of prices in the commodity fields. One of the reasons that the Commodity Exchange has been attacked now is the issue of closing the hands of brokers in interfering in the exchange transactions. Documentary evidence suggests that rent-seeking and trading centers continue to seek to exploit the transparent structure of supply through the commodity exchange with the aim of exploiting peripheral steel markets. While the production of steel in the country is in excess of the volume of consumption, but traders with the aim of making more profit seek to upset the balance of supply and demand in the market and create successive fluctuations.
If in the current situation, the pulse of the market can be handed over to specialized unions and associations and macro-policies can be extracted from these gatherings, we will see a growing growth in the country’s steel industry. In addition to being in direct contact with the end consumer, the Iron and Steel Association can identify and evaluate problems in this area and help the manufacturing sector. Of course, this is possible provided that a clear path and flow in this process is defined.
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