Yesterday, a new chapter of domestic steel prices was introduced in the market, which was ribbed rebar in the showcase of price increase. This became an excuse to talk about the increase in steel prices over the past 14 months. The growth of steel prices in the world market gave Iranian steel the opportunity to have an excuse to increase domestic prices. It remains to be seen how the buyers will react to this price increase. Please be with Artan Press until the end.
*** Steel price growth from the perspective of ribbed rebar
Examine steel prices from the ribbed milker trading table to better understand the transition from equilibrium to higher prices. According to yesterday’s prices of ribbed rebar market in the price range of about 13,900 to around 14,600 Tomans / kg, including VAT, the average price of yesterday in this market was traded at about 14,230 Tomans. Of course, this product was priced at about 13,055 tomans without VAT. It was estimated that compared to the previous day, it has been accompanied by an average and approximate increase of about 35 Tomans. The point that is obvious in yesterday’s pricing is the issue of entering the price of ribbed rebar into the channel of 14 thousand Tomans. It seems that with the current situation, we should say goodbye to the prices of 13 thousand Tomans.
*** Analysis of the causes of the growth of domestic steel prices
But why this price analysis? About 126% increase in the price of ribbed rebar in the domestic market has occurred since the beginning of 1399 until today, which has several reasons. One of the most important reasons for this is the increase in export rates of steel products. Steel $ 326 / ton export at the beginning of 1399; It has now experienced $ 715 / ton, an 119% increase in world prices. The second issue can be seen in the sharp growth of the dollar price in the previous year. The average weekly buying and selling rate of the half dollar at the beginning of 1399 is about 13,600 Tomans; Now 20,560 Tomans; That is, it has experienced a 51% price increase.
*** The role of input growth in the sharp rise in steel prices
In addition to the direct factors affecting the growth of steel prices in the domestic market, we can mention the general inflation and rising wage levels this year. In this regard, increasing the price of raw materials in all layers of the supply chain; Rising energy prices and wages were the main candidates for the growth of domestic steel prices. This issue has become an excuse to see an average price increase of 11% (1400 Tomans / kg) of ribbed rebar in a steel product item from the beginning of this year until today. This means that in just 44 days; In other words, an average price increase of 32 Tomans / kg per day has occurred in this product, which alone can be a surprise in the growth of Iranian steel prices.
*** Generalization of domestic steel price growth to all areas
If we want to observe this issue for each market, we will reach the same prices. For example, increasing iron scrap rates; concentrate; Pellets; Sponge iron and ingots; An increase of at least 49 percent in wages, as well as a significant increase in electricity and gas consumption rates, all explain the reasons for the significant increase in rates in the domestic fold. Apparently, these days, he has thought of decisions based on the long-term policies of the government in order to gradually eliminate production subsidies. This issue has caused dissatisfaction of the private sector, at least as much as a rumor.
*** Unfavorable conditions for the final buyer of the domestic steel chain
An 119 percent increase in export steel, if left alone, along with a 126 percent increase in the price of ribbed rebar over the past year; We find that the situation is not very interesting for the consumer these days. So these days we just have to pray and hope that either the value of the rial increases significantly. That means lowering the dollar. Or the world price of steel retreats, none of which seems to be desirable for the export spheres and large manufacturing companies. Therefore, it is predicted that the growth of steel prices in Iran will be stabilized. The end consumer must think of a solution to this threat. Otherwise, we will see huge failed and abandoned construction projects throughout Iran.
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