Steel ingots trading will return to the Iranian Commodity Exchange after a long absence of 20 days. Various scandals have been raised in this regard these days. But the most important factor that caused the temporary interruption of ingots in the market was high price fluctuations, reduced production of ingot factories due to power outages and a sharp decline in inventories. Of course, there was talk of offering ingots to export markets, which was not confirmed by official sources. But in any case, from Tuesday of this week, we will see the supply of this product in the commodity exchange. In the following, we will evaluate this issue. Please be with Artan Press.
*** Return of steel ingot transactions to the commodity exchange board
Steel Ingot Trading returned to the trading session. In this regard, tomorrow, a total of 107,500 tons of ingots will be offered on the commodity exchange at a weighted average rate of 133,677 Rials, which is priced at about 14,570 Tomans, including VAT.
The last time the bullion was traded on the Commodity Exchange; It was on July 6 of this year that 119,060 tons of ingots were offered at a base weighted average rate of 131,503 and finally 89,600 tons of this supply was traded at a competitive average weighted rate of 132,458 rials. It seems that the steel ingot trading market will be acceptable tomorrow. If we see a scenario other than this, we will definitely find the market on negative days. Ingot has always been a crucial commodity in the steel market.
*** Steel ingots trading record in the latest supply
Average competition in the latest supply; The ratio of the average base rate to the average trading rate (weighted) was 0.72 percent. This shows that the closure and cessation of sales of steel ingots is not very good for the producer and the cash flow of producers is facing problems. The average increase in the current base rate compared to the weighted average trading rate of the last offer was about 0.92%.
*** Lack of capacity building in the period of stopping the supply of ingots
Steel ingots trading on the Commodity Exchange may have returned to the trading ring. But in these 20 days, there has been no change or capacity building to discover the price. There is always a risk in the market that this product will be excluded from trading again due to the decrease in iron ore production. On the other hand, with the continuation of the trend of electricity problems, the shadow of reduced production is still felt on the market.
The Steel Association has announced that it can increase production capacity to 40 percent with 4,000 megawatts, but it seems that Tavanir has said that it is possible to supply half of this number at the moment. These scenarios carry risks for steel ingot trading. If this trend continues, the black market for steel ingots will most likely be waiting for the markets.
*** Electricity supply is the biggest challenge in steel ingot trading
Power supply constraints are currently the biggest challenge for the steel exchange and the balance of supply and demand. Steel ingots trading, although multiplied by this issue, did not suffer much damage due to the lack of active demand in the market. Continuing this trend, however, can be costly for the entire market. Therefore, the supply of steel ingots in the stock exchange should be supported. Despite the relative decrease in temperature, the electricity supply limitation of steel units will probably continue until the end of August, and the supply of ingots and sections in the stock exchange is in a haze of ambiguity.
Due to the production conditions and the currency situation, the sales bases continue to increase slowly; However, there is no real customer in the market for these prices, and even the supply of sections and sheets of the commodity exchange last week, despite the lower price than the market, was not in strong demand. This suggests that a 1% growth rate for steel ingot transactions could be met with a negative reaction. Of course, this is a bit pessimistic, but it is possible.
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