Instead of encouraging the steel industry, the Ministry of Energy is blocking their way. A fine of 3 billion tomans per day was considered by the Ministry of Energy for overhauling factories. Investing in non-governmental industries in the electricity industry prevents blackouts. But the problem of the electricity industry in the current situation is not solved by private individuals. The private sector budget for the development of the electricity industry is very small.
According to the Iranian Steel Producers Association (ISPA), in the first five months of this year (March 21 to August 22, 2021), Iran has seen a significant reduction in steel production. ISPA data show that producers produced 10.8 million tonnes of semi-finished products during this period. This amount of production, which has decreased by 12% compared to the previous year, is in the Iranian steel showcase.
And noticeable changes. Every effort has been made to enable the commodity exchange to follow the path in which price discovery takes place. The market desperately needs an organized order in pricing. This plan seems to have a high chance of success if implemented properly
The cement market has had unprecedented days in its trading history this summer. The price of the cement market went so far that one can hear talk of 70,000 Tomans per bag of cement in the sales market. The most important reason for the fluctuations and inflammation of the price of this building material can be considered in the continuous cutting of the price of production units. Because this year, for the first time, we saw this trend in electricity distribution. If the rains are limited in the second half of this year, it is likely that next year the living conditions of the people will be very critical. Environmental crises in the current situation will overshadow all markets
He has pointed out this point. A noteworthy point is the $ 20 to $ 30 gap between Iran's export ingot rate and the CIS. It seems that Iran intends to pave the way for its steel price growth with the growth of world iron ore prices in the coming months.
Due to the market perception of strengthening supply in the commodity exchange, the continued decline in world prices, the shock of falling iron ore prices along with weak demand, all the fundamental factors of the market are in favor of falling steel prices. Of course, the market is always resistant to declining trends due to price stickiness. Due to power outages, prolonged blackouts and long shutdowns of steel production lines, the supply of steel products decreased.
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 allow prices to fall in world markets. If Iran is to pursue the growth of 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.
EghtesadOnline: Deputy Industries Minister Saeed Zarandi said losses inflicted by power outages on steel mills affiliated to the Iranian Mines and Mining Industries Development and Renovation Organization have been estimated to reach $235 million per week.
Iran's steel market has experienced several ups and downs in a period of six months. The steel market has been hit hard by various corona peaks and dollar fluctuations. Under the current circumstances, the government and the dollar exchange rate will be two very key factors in determining the future price of steel. There is still no specific behavior on the part of the government that is based on an economic tactic.
Although the dollar has risen sharply in recent weeks, it has slowed in recent days. Despite the market resistance to prices, we see that rebar manufacturers have increased the price of their products. Yesterday, the price of rebar increased by 400 to 500 Rials per kilo. The foreign exchange market has not reacted to the Japanese foreign minister's visit, which is said to send a message to Iran. On the other hand, the situation of Herat foreign exchange market as one of the two cross-border cash foreign exchange markets is still in a state of ambiguity. Political issues seem to keep market trends on the rise.