1- Last week, due to the stagnation of demand, the Indian government removed the customs duties on steel raw materials, and this will reduce the price of concentrate and sponge iron.
2- Due to the renewed outbreak of Corona in China, the outlook for steel demand is still weak and unclear.
3- Determining the price ceiling for Russian oil will put pressure on the price of oil and this will reduce the price of bullion.
4- The global markets are in the heat of January, so the demand in the northern hemisphere and America does not have a strong outlook.
The result of all this is that the price and demand will have a downward trend.
In the domestic market
1- The average base price of sponge iron in the commodity exchange decreased by more than 900 tomans.
2- For the first time, the bullion had no buyers in the stock market, even the long-term supply was not welcomed.
The price of bullion in the market is about one thousand tomans per kilo, it is cheaper than the average selling price in the stock market.
3- The rebars offered in the stock market were not sold. The reason was the price difference of more than 1000 Tomans with the market.
4- The restrictions that the stock exchange has created for the supply of factories, so that those who purchase their bullion from the stock exchange must also supply their products on the stock exchange, has caused the order market to be far away from the real market.
Today’s market is under two pressures:
The first pressure comes from speculators who have bought raw materials or products for a period of time and are offering them in the market in cash. Factories that are engaged in long-term supply, if they are looking for cash sales, they must lower the price very much, in this case, the market will retreat strongly and the entire steel chain will be questioned.
The second problem is the precautionary motivation of buyers, which is caused by the declining trend in the domestic market and the global market, with the addition of social issues. As a result, even though it is not a construction project, the commercial demand of the market also reaches zero. The only way out of the problems is for the government to strongly encourage exports, and for this, it should consider an export bonus for steel, and on the other hand, in the domestic market, stop unnecessary controls and undue interference in the steel industry, especially by Take the stock market. In a situation where the supply is much more than the demand, government controls will not have any other result than creating bankruptcy, the size of the steel market is so strong that it will easily cause problems for the banks. It is better for the government to think of a solution before the work is forced.