The steel market has gone through many ups and downs in the past week. According to the website of the Iranian Steel Producers Association, after the third consecutive week of the supply of slabs in the commodity exchange, the demand for purchasing this steel product is still limited.
Slabs have returned to the commodity exchange after about two years, but it seems that the mechanism for trading them in this market has not been provided yet and the rolling units have not been convinced to buy slabs through the commodity exchange. Last week, 85,000 tons of slabs were offered by Mobarakeh Steel, Khuzestan Steel and Hormozgan Steel in the non-match trading commodity exchange, of which only 25,000 tons were traded.
*** Slightly welcomed slab supply
One of the reasons for not accepting the supply of slabs in the commodity exchange is that rolling companies must supply hot rolled sheet in the commodity exchange equivalent to 95% of the received slabs. According to the directive of the market regulation working group, the supply time of hot plate by rolling units has been announced up to one month after the delivery of the slab. Rolling companies are still not convinced about the supply of hot-rolled sheets in the commodity exchange, and this may be one of the reasons for the poor reception of the supply of slabs in the commodity exchange.
Some rolling stock companies believe that the base price of hot rolled sheet on the commodity exchange is lower than the cost of raw materials purchased by them, and therefore do not quite agree with the current form of hot rolled sheet trading on the commodity exchange. They say that the cost of buying slabs for them is more than the base price that the Commodity Exchange considers for the supply of hot rolled sheets of Mobarakeh Steel Company.
According to the recent directive of the Market Regulation Working Group, non-supply of slabs in the commodity exchange is considered as “off-grid supply” and “disruption of economic order and stability”, and rolling companies must purchase slabs required for their products from the commodity exchange.
It seems that measures should be taken quickly to improve the demand mechanism for slabs in the commodity exchange and rolling units to have the necessary desire and motivation to buy slabs.
*** Supply of steel raw materials
The good news last week was the issuance of an annual supply license for the 1,750,000 tons of iron ore required by the Isfahan Steel Company, without the need for an auction by the cabinet. The government board allowed Imidro to supply a maximum of one million tons of granulated iron ore required by the Isfahan Steel Company from the Sangan mine and a maximum of 750,000 tons of granulated iron ore required by the company from the Chahgoz mine without holding an auction by the end of 1399. This is good news for Zobahan Company, which has always faced the problem of iron ore shortage and consequently empty capacity in recent years.
Another positive point of the Cabinet decision for Zobahan Company is that with the approval of the Ministry of Industry, Mines and Trade and fulfillment of contractual obligations by Isfahan Zobahan Company, the Cabinet approval to supply the required iron ore for Zobahan can take up to 10 years for the mine. Wells and extended for 5 years for Sangan mine.
The Achilles heel of Zob Ahan Company has been the stable supply of large-scale iron ore required by this company. Many mines in recent years have preferred to convert it to concentrate or export it instead of selling iron ore to steel! This made it difficult for Zobahan to supply iron ore, forcing the company to shut down its number one blast furnace, Iran’s first blast furnace, which dates back to about 50 years ago. This decision of the cabinet can become the prelude to a great change in Isfahan Steel Company.
*** Bitter stock market week
The best steel symbol of the stock market last week should be considered Arfa. Last week, shareholders left behind a nightmarish trading day, one of the bitterest stock market weeks in years. For this reason, Arfa symbol has been selected as the best steel symbol in the last week, which had a positive return in total last week. In the last 5 working days of last week, the Arfa symbol experienced a growth of 8.1%.
*** Stock steel supplies
In the past week, 240,804 tons of ingots and steel products were traded on the Commodity Exchange. The total value of steel products transactions in the commodity exchange last week was 2185 billion tomans. Last week, Mobarakeh Steel earned 1112 billion Tomans from the sale of its products on the Commodity Exchange. Of all the steel companies, Mobarakeh Steel had the highest sales value of products on the Commodity Exchange last week.
*** Concluding remarks
The steel market has been experiencing significant inflammation in recent months. Continuous changes in the management of the Ministry of Industry, Mines and Trade have also added to this inflammation. After Hossein Modaresh-e-Khiabani failed to win a vote of confidence from the Islamic Consultative Assembly for the ministry, President Hassan Rouhani issued a decree appointing Jafar Sarghini as head of the Ministry of Industry, Mines and Trade. Since Sarghini has been the Deputy Minister of Mines and Mineral Industries for 14 years and has good control over the steel industry and market, it is hoped that the challenges in this sector will be resolved soon.
SMT
این مطلب بدون برچسب می باشد.
ثبت دیدگاه