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Iran's steel products exports decline due to low prices

Economy Materials 26 August 2019 11:47 (UTC +04:00)

Iran, Tehran, Aug.26

Trend:

Iran's steel products export is facing a decline due to low prices in domestic market, said the deputy chief of Iranian Steel Producers Association.

Bahador Ehramian discussed the volume of steel products exports in an interview with Trend.

"The exports of steel products have declined and the planned target numbers for current Iranian year [started March 21, 2019] have not been achieved. In addition, the target price for exports also had a fall back and we could not reach the target volume and price," he said.

"In this regards, the general revenues from export of steel products was less than predicted," he noted.

"The production was based on domestic needs, the production is a good approach and finding market would help us to increase the exports volume," he said referring to production.

"The producers are facing the issue of management policies in the market and the fluctuation of domestic price. Some producers say the domestic issues are bigger than the sanction problem," he noted referring to producer's problems.

"The government persistent to keep the low prices that is an issue for domestic producer. The price of Iran's steel is lower than global price," he added.

"The price of metal based on 120,000 rial free market foreign currency rate is currently $310 per kilo with value added and $320 without value added. The following prices are lower than scrap metal price," he said.

"The government pressure on producers to supply metal at commodity exchange and annulling the transactions due to the price would cause the prices to be low in the market. The pressure to keep the price of steel products lower than global scrap metal price would lead to reduction of the steel revenues," he noted.

"Low prices in domestic market have caused neighbor countries to implement import tariff on our products that is another problem for Iranian producers; meanwhile, during the sanctions, the exporters found the way to export their products via re-export," he said. "Our problem is domestic market otherwise foreign problems would be solved by extra expenses."

In his words, the liberalization of foreign exchange rate is a solution to exporters problems. "There should not be an obligation for return of exports revenues; the foreign currency revenues from exports should return back to country, but now the one identified solution is NIMA system," he said.

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