The outlook for the steel market in the current situation is assessed with a relative recession compared to last year’s statistics. The head of government faces challenges at the beginning of its term that will determine how to deal with it. It seems that Iran’s steel markets have been affected by the growth of the exchange rate. In some markets, domestic prices are higher than export rates. This issue has been unprecedented in the Iranian market. The outlook for the Iranian steel market will fluctuate and reduce the desire to buy if fundamental and structural reforms do not occur. In the following, we will evaluate this issue in more detail. Please be with Artan Press.
*** The perspective of Iranian steel in the 1404 document
At the beginning of each discussion, we return to the 1404 vision document in the field of steel. Of course, we are fundamentally opposed to drafting such long-term documents. But in the current situation, in order to be able to assess the outlook for the steel market, we need its goals. According to the Socio-Economic Development Outlook, the country’s steel production in 1404 should reach 55 million tons, so the head of state should pay special attention to the issue of mineral exploration and carry out large-scale exploration activities. Identifying new mines may not be the right thing to do, given that Iran’s national mineral reserves are running low in the next 20 years. The new government must develop low-cost, low-waste steel processing methods over the next eight years.
*** Identify mines and grow the strength of the steel economy
On the other hand, efforts should be made to preserve the identified potential mines for future generations. A number of rich mineral areas have been identified, but this is not enough and we need a lot of exploration work. The country’s industry should go towards exploration that can create higher added value in minerals, especially hematite iron ore. In the new government alone, one should not seek to discover new mining areas. One should think about the productivity of the country’s mines. In this way, the outlook for the Iranian steel market can be fully optimized.
*** The role of international interactions in improving the prospects of Iranian steel
Another important issue to consider regarding the steel market outlook is the issue of Iran’s international interactions during the presidency. If Iran still has problems selling its products, we will have a bad situation ahead. Sanctions have imposed heavy costs on Iranian steel in recent years. On the other hand, they have completely overshadowed Iran’s competitive advantages and bargaining power. Due to sanctions and lack of imports, our mining machinery is very old. Therefore, the worn-out transportation fleet of the country’s mines needs urgent equipment. Although the Minister of Industry has issued a license to import mining machinery, the import of new machinery must be accompanied by technology and technical knowledge.
*** Efforts to maintain the export position in the main government
In recent years, Iran has been the tenth largest country in the field of steel exports. It is very difficult to maintain this position in the main government. Due to the frequent power outages, sanctions and the reduction of Iran’s power in fulfilling its obligations, we are facing a different situation. On the other hand, political events and issues such as the developments in Afghanistan or the change in the Iraqi way of buying steel from Iran have caused the future of Iranian steel to be associated with challenges. The new government should seek more exports and more quotas from global markets. This government must be able to export the final steel products to other countries in order to gain a larger share of this market.
*** Reliance of economic indicators on the steel market
Iran’s steel industry is one of the most profitable industries in the country. Nearly 8% of the total job creation in the country is directly subordinated to the steel market. If we consider the indirect markets with steel, more than 40% of the country’s employment is in the steel chain, which is a significant figure. Volt Raisi must have developed a serious and operational plan for this parent industry. The steel industry is one of the most lucrative and strategic industries in the country after petrochemicals, so the new government should pay great attention to the steel industry, its producers and even its final products.
*** The need for optimal supply of raw materials for the growth of the steel prospects
An important issue that sets a favorable trend for the steel market outlook is the supply of raw materials. If the raw materials of a steel plant are supplied on time, standard and quality products will be offered to the market, but if the production materials of a steel plant do not arrive on time, the steelmaker will have to supply raw materials from low quality products. This year is a year of disengagement from production. So far we are far from this slogan. Despite the explicit recommendations of senior officials in the country to prevent and support production, some steel mills still have to use low-quality products to survive, which will definitely affect their final products and reduce the quality of products. .
*** Strong dependence of the steel market on the price of iron ore
Iran’s steel prospects are heavily dependent on iron ore. We must carefully examine the trend of this mineral in the main government. Iron ore seems to be allowing prices to fall in world markets. This can overshadow prices in the domestic market. As many international activists and analysts had predicted from months before and even before the start of 2021, a relatively sharp downward trend in the iron ore market has begun and its turbulent waves continue and have not yet reached the shores of calm. Is.
*** The need to pay attention to global development indicators in the Fu sector Steel
If Iran seeks to grow global development indicators in the steel sector, it must keep pace with global growth. Operating as an island in the steel market is doomed to failure. One way to improve the quality of the steel chain is to develop export markets. Because having a strong outlook in the export market will lead to quality control of these products in the domestic market and the continuation of transactions in export target markets. With the implementation of the raw material supply plan, the steel industry can enjoy a special order in the production of its products, which will spread to both the domestic and export markets, a plan that is also included in the plan proposed by the new Minister of Industry.
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