In the current situation of the Iranian steel market in terms of price and in terms of export power is in a situation that can be less imagined. The 12 percent growth in steel exports this year, at a time when many developed and powerful countries were in the midst of the Corona crisis, was practically a means to stabilize Iran’s steel position in the international market. In this note, we will deal with the supply situation in the domestic steel market so that we can examine the general trend and the depth of market stability. Please be with Artan Press.
In the current situation, the steel market is in a position where the market forces are moving towards growth and prosperity. In the current situation, the market for speculators and rents is very narrow and the possibility of volatility has reached a minimum. In some areas, there is still market inflammation due to lack of transparency in supply and pricing, but it is expected that in the coming months we will see the removal of barriers to transparency in these sectors.
*** Speculators in a tight spot
Many iron merchants, from bankers to retailers, are worried and dissatisfied with the order in the market and the conditions in which prices can be estimated in the coming days, because in the uncertainty of the market, the price was determined by the broker and the consumer. The final was caught in the corner of the trading ring. But with the introduction of new rules and the prevention of arbitrary pricing policies and the sale of steel machining trades, the arena has narrowed to speculators.
In the current situation, many traders are trying to disrupt the supply and demand order and disrupt the purchase path of real buyers to create some tension in the market and inject their depot products into the market by chance. This is the most strategic approach that Iranian steel market speculators have planned for, which is why they are looking for an opportunity to reduce supply on the commodity exchange and implement steel trading match projects.
*** Increase production and exports in the steel market
Iran’s steel capability has increased in recent years and the maneuver of investors in the steel sector has grown significantly compared to the past. This investment maneuver has created the hope that the steel industry will be able to occupy a significant part of the country’s currency in its 5-year outlook.
On the other hand, the volume of domestic production of Iran’s steel industry has increased in the last two years and this increase in production has led to the expansion of mafia relations in the production of ingots and even the final products of the steel chain and the iron market has gone out of its normal state. This issue can be considered as the Achilles heel of the steel industry in terms of the supply of final products, and policymakers in the steel industry should pay attention to this issue and provide solutions to overcome the lack of transparency in the field of ingots.
One of the approaches that should be implemented as soon as possible is the sale of all steel products, including the downstream steel chain and the final products on the stock exchange. If, according to the government’s plan in the new procedure, all products are offered on the commodity exchange, the market will go through its normal routine and will go out of fluctuation, and both the seller and the buyer will know their duties.
*** Matching bottlenecks in Mobarakeh Steel
Isfahan Mobarakeh Steel is the largest steel producer in Iran. Unfortunately, 60% of the production of this factory is given to certain groups of companies and individuals. So it can be claimed that the largest steel rent in the country is in the bottleneck of Mobarakeh Steel Machining Trading. Therefore, it can be argued that quotas and grammatical pricing system are the main cause of rents and steel matching transactions, and until this problem is resolved, we will continue to see such events.
In the current situation, we must move towards the parameters and indicators of the establishment of a free economic system in the country. If the economy is free and prices are set on the basis of supply and demand, because there are fewer potential rents in the industry, steelmakers will do less, and policymakers will achieve their main goal of better market balance and reducing corruption.
*** Iron market conditions; The most important member of the Iranian steel market
Unfortunately, the conditions of the iron market, which is an important member of the steel chain, are not very suitable in the current situation, and the market situation has become such that any body, company and institution that produces iron or is responsible for its storage decides on prices. Slow and pushing up or down prices, this is the first factor that fluctuates market conditions.
Iron market conditions are by no means what the end consumer means. Only manufacturers and wholesalers will benefit from these price fluctuations, and end consumers will be severely affected by these conditions. Electronic systems had previously been used to control supply in the steel market. But these requirements have not been used properly and its operation has been intermittent. Sometimes it is not at all clear where these factories offer their products and whether the Ministry of Silence monitors this issue or not.
*** Continuation of the alignment of Iran’s export prices with world prices
In previous analyzes, the issue of convergence of Iranian steel export prices and world prices was mentioned. This can pave the way for buying subsidies for domestic buyers. On the other hand, the trend of changes in the price of slabs and billets exported by FOB Iran. The prices offered in the CIS market show the continuation of the alignment of Iran’s export prices with world prices.
In the current situation, the Iranian steel market is in a very sensitive situation. If the monitoring is done on fashion Revenues and pricing practices perform well and market controls are applied continuously. It can be expected that in the next one year, the conditions for fluctuations in Iranian steel market are not favorable, and this issue is highly It benefits the consumer and even the producer.
*** Iran is an exporter of various steel products
In recent years, the steel chain in the country has developed so much that Iran has changed from an importer to exporter of various steel products, so that industries related to the steel chain from iron ore to final products such as sheets, rebars, beams, etc. almost They meet all domestic needs, and we are exporting some products due to the excess of production over the needs of the country. In such a situation, we only need a systematic order in the supply process, and this can be achieved by implementing a new steel method.
Supplies of the steel industry are important because many markets base their policies on the final price of the steel chain. Although steel plays an important role in the automotive, home appliance, housing, oil and gas industries and hundreds of small and large industries, despite significant advances in steel production and supply, the domestic steel market is still inflamed and prices in the market despite energy use. Subsidies, workers’ wages in Rials, etc. are far beyond world rates. It is expected that with the correct implementation of the steel pricing guidelines, space will be provided for more stable exchanges as global prices approach.
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