Khodrocar - Plans to supply cheap raw materials to the automotive industry were made by steelmakers last year, raising hopes among automakers that increasing the production capacity of domestic steelmakers would solve the problem of rising raw material prices. But this year, five months into the year, not only has this goal not been achieved, but automakers believe it will be more economical to import sheets these days. Meanwhile, currency fluctuations have also fueled rising prices and posed serious challenges to car production.
Reza Shahrestani, member of the board of steel producers said to Khodrocar reporter that exporting slabs in the past year is the main reason of price increase.
"The price in the market is always determined by supply and demand. The main problem last year was the export of two million tons of slabs, while if not exported, this amount could be used as a raw material for hot rolling. Production reaches or is used in the production of cold rolled and oiled sheets, which are mostly used in the automotive industry, but in practice this did not happen.” He said.
"According to the plans, the export of slabs has decreased by 90% since the beginning of this year. The main problem is the price of currency.” He said.
"This trend has led to a lack of proper planning for the future and producers to move to the raw material depot, which has led to a shortage of raw materials and increased prices.” He continued.
"Order pricing has led to market turmoil and there is a significant difference with the actual prices in the market, especially in sheets, there is a price difference of 50 to 100 percent, so if they were allowed to find their own supply and demand, the price difference The rent that was created could be divided between the producer and the consumer, so if this rent is removed, the profit will go to both parties.” He added.
"This issue was requested from the Ministry of Industry, but in practice this did not happen. Meanwhile, many companies that do not consume use the optimizer and send the goods to the consumer with a difference of 50 to 100%. Our view to solve this problem is to liberalize supply and demand, while with the liberalization of Mobarakeh Steel 2 rolling mill, we will increase the capacity by three million tons, which will reduce these inflammations in the long run.” He said.
"Many private companies are active in the hot and cold rolling sheet sector, which due to sanctions and high currency prices and conditions such as the corona, will slow down the goals of Vision 1404, which produces 55 million tons of steel. We have a high investment.” He said.