Evaluation of steel market bottlenecks in Iran Stock Exchange - آرتان پرس | مرجع رسمی اطلاع رسانی فولاد | آرتان پرس | مرجع رسمی اطلاع رسانی فولاد

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Evaluation of steel market bottlenecks in Iran Stock Exchange

شناسه : 32300 ۲۸ مهر ۱۳۹۹ - ۱۳:۲۸
Unfortunately, since the price of the dollar experienced an irrational increase, mineral, steel and iron goods in the market were looked at as capital goods, and any commodity that has the potential for capital will not be left out of the eyes of brokers and intermediaries. The spectrum of people in the market causes disorder and disrupts the natural process of supply and demand
Evaluation of steel market bottlenecks in Iran Stock Exchange

Iran’s steel market is faced with new issues every day that these factors are rooted in the inefficient supply chain in the discussion of steel distribution in the stock exchange and OTC and the free market. Unfortunately, since the price of the dollar experienced an irrational increase, mineral, steel and iron goods in the market were looked at as capital goods, and any commodity that has the potential for capital will not be left out of the eyes of brokers and intermediaries. The spectrum of people in the market causes disorder and disrupts the natural process of supply and demand.

Unfortunately, the difference between the prices of steel products in the free market and the price lists approved in the commodity exchange have no similarities, and the offered prices are very different from the real consumer power. This issue, if not managed, will definitely have a significant impact on housing and car prices, which will not be offset even by the depreciation of the dollar.


*** Steel Exchange Matching Trading A destructive actor in the steel market

At present, the price difference between Mobarakeh Steel products, which is done through the Commodity Exchange channel, and what happens in the open market, is about 70% different, which creates a heavy rent for some and a cost for the producer. And the real consumer is very high.

One of the most important reasons for this is the lack of proper balance in the management of demand for steel exchange transactions. The issue of matchmaking should be removed from the commodity exchange trading system as soon as possible, because it is a privilege that does not happen transparently among all stock exchange players, and after receiving this subsidy, it is traded in the open market with a difference of nearly seventy percent. It also suffers because in the sale of steel sections, tonnage is the most important factor of profitability, and the volume of sales at high prices for factories such as Mobarakeh Steel in the medium and long term is not cost-effective at all.

In the current situation, the government should have strict control over the management of demand in the two critical areas of the steel market these days, namely slabs and long sections, and through expert capacities in parent companies such as Mobarakeh Steel, minimize market inflammation and reduce production. Offer a fair form in the market. Since the elimination of thematic matching transactions is time consuming and is expected to take at least six months, the only way to control the current inflammation of the steel market is to reduce stock levels in the areas of long sections and slabs and quench market thirst by increasing supply. .


*** Review of quick-return solutions to control inflammation of the steel market

Now the government has to come to terms with the deadline and change the situation in favor of the producer and the consumer by controlling the invoice.

Stopping the export process temporarily should be on the agenda of commodity exchange policy makers. With the current situation, the domestic steel market will suffer heavy losses. Although exports are a vital issue for foreign exchange, the government must shift its focus from selling products that are in high demand in Iran, and currently move its export strategy away from Jose Takhtal and long sections.
Proper management must be done so that steel transactions can only be done through commodity exchanges so that rents in the open market can be reduced.


*** Export losses of long sections in the current situation

Why are exports harmful to the Iranian Commodity Exchange at this time? According to Metal Bulletin analysis reports taken from Iran’s customs statistics, in the first six months of this year, we imported 432,000 tons worth $ 745 million worth of steel raw materials from Turkey. This amount has decreased by 27% compared to the same period last year. At the same time, the volume of exports of 725,000 tons of Iranian products to Turkey has increased from $ 488 million to $ 551 million, which is estimated at 38% of Iran’s export growth. Significant changes in foreign trade statistics show a 27% decrease in imports and an increase Iran’s exports to Turkey are 38%, due to the devaluation of both countries in the first nine months of this year.

The price of currency in Iran has increased by about 100% and the value of the Turkish currency has decreased by about 40% until last week. Therefore, it seems that exports to Turkey, despite the depreciation of both countries’ exchange rates and dollar-based transactions, cost Iranian producers more than importing goods from this country. This is to the detriment of our economic system. Countries that target Iran’s long steel products benefit more from this issue than Iran, while in the country we desperately need long slabs. Therefore, with the devaluation of the Iranian currency and sometimes the supply of some raw materials in dollars and euros, this issue is not cost-effective and creates a loser-loser relationship for the producer and consumer of domestic steel.


*** Evaluate the production status of long sections

We need to increase production to solve the current problem of the steel chain. Perhaps the first argument is that production capacity is limited and there is no potential for further production. But a review by the Artan Press analysis team resolves this ambiguity.

Manufacturers of the country’s steel sector last year shipped 20.514 million tons of their products to the domestic and international steel market, and with this volume of production recorded a growth of 4.5 percent in their portfolio, which is 19.639 million compared to the same period last year. There were more and more people who had some opponents in the field of environment, which by solving the Persian Gulf water and pumping the Persian Gulf water for industrial use, the environmental challenges of steel production were solved.

According to the reviewed data from the aggregate reports of steelmakers, the total capacity of the active units of the country in addition to practical and The number of projects that may be launched within Iran or neighboring countries according to different scenarios is 65.3 million tons, which is enough to meet the most severe domestic needs.

The data of the Ministry of Industry show that if the practical projects and possible projects of the country become operational by the Iranian calendar of 1404, Iran will have 19.3 million tons of surplus steel production that can be exported to other countries. This is exactly what we are looking for. A complete response to domestic demand and the export of 19 million tons of steel to the world. Iran is the tenth largest producer of steel in the world and the steel sector has the strongest potential in the country’s export sector, especially to neighboring countries.


*** Official statistics of international forums

According to a report released by the World Steel Association (WSA), the country’s crude steel production increased by 30% in 2019, while the average global growth in this sector was 3.5%. According to the WSA, Iran produced 31.9 million tons of various steel items during 2019, which is about 40% more than the same period last year.

This means that we do not have a single product of steel production and we have been able to experience an upward trend in the production of different climates. Iran, which ranked 13th in 2017, overtook three of the world’s largest steelmakers, Italy, Taiwan and Ukraine, to be ranked 10th in 2018, despite US re-imposition of sanctions.

All the explanations were given with the aim of clarifying Iran’s production capacity to compensate for the shortcomings of the domestic steel market and then exports. Iran Stock Exchange has been eliminated.


Artan Press

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