Improving the steel pricing method had become one of the main concerns of the automotive industry, and it seems that with the changes in the pricing method of this strategic product, from now on we have to worry about the rents and the multiple prices of this product.
Khodrocar - In the meeting of amending the steel pricing policy, which was held in the first week of December in the presence of the Vice President for Economic Affairs, it was decided that the next meeting will be held after reaching a final conclusion and applying expert opinions. At a meeting held in this regard, the Vice President stressed that the government does not seek the golden signature and the distribution of rents by announcing this policy, and if such a thing happens, it will deal with it severely.
According to the plan, it was decided to compile the executive instructions of this method with the aim of removing ambiguities, considering the export plans and obligations of the factories within a week, and the amount of domestic supply of steel companies, taking into account the performance and export plans of the factories. The instructions are formulated to avoid different interpretations and flaws in the golden signature.
But a month after the meeting, the Minister of Industry announced the formation of a steel committee to determine the price and stressed that the law allows steel products to be offered on the stock exchange and all producers must sell all their products according to the steel rules on the stock exchange. Therefore, from next week, the Steel Committee will hold a meeting to balance the supply of steelmakers on the stock exchange and balance its price in the market.
Finally, Alireza Razm Hosseini announced yesterday the base price of steel ingots on the stock exchange based on 70% of the CIS price, which is contrary to the price set in the method of organizing the supply and demand of the steel chain. Razm Hosseini, meanwhile, recently announced that setting base prices was the reason for the rise in steel prices, and stressed that it was not clear on what basis these numbers were set.
He also blamed the Ministry of Economy for the increase in steel prices, regardless of the effect of rising exchange rates and world prices and rents on the downstream steel distribution network.
The official announcement of this decision provoked many reactions, so that Hassan Qalibaf Asl, the head of the Exchange Organization, criticized this decision and stated that when a product is sold at a cheaper price than the real price in the Commodity Exchange, in addition to the manufacturer Losing, the shareholders of these companies, which are subject to equity shares, will also suffer.
Meanwhile, Pour-Ebrahimi, the head of the parliament's economic commission, also announced that mandatory pricing, in addition to creating rents, is a factor for the loss of producers and consumers, and stressed that not all items listed on the country's commodity exchange are subject to pricing.
The Commodity Exchange, as the executive body of this decision, did not comply with the order of the Ministry of Industry and referred the orderly intervention in steel pricing to the Supreme Council of the Commodity Exchange. He refused and referred the request of the Ministry of Industry to the Secretariat of the Supreme Council of the Stock Exchange.
These decisions are while one of the main slogans of Alireza Razm Hosseini since coming to power in the Ministry of Industry, removing monopolies and eliminating corruption and rent, while steel industry experts believe that this decision will create large rents in the industry.
In the meantime, the automotive industry, as one of the industries that is directly related to the steel industry, will definitely be affected by this decision.
"The experience of grammatical pricing has generally failed, and we see this clearly in the automotive industry, where the approved price has caused industrial losses as large as the automotive industry, and steel production in Iran in this respect with the automotive industry is comparable.” Mehdi Motaleb Zadeh, manager of inner production committee of part makers association told khodrocar reporter.
"Experience has shown that the pricing of strategic goods by the Ministry of Industry can’t be successful and leads to rents in that sector and reduces the incentive for companies to offer large and continuous offers on the commodity exchange.” He added.
"This pricing trend will create a crisis in the future of the steel industry and the automotive industry.” He continued.
According to the plan, it was decided to compile the executive instructions of this method with the aim of removing ambiguities, considering the export plans and obligations of the factories within a week, and the amount of domestic supply of steel companies, taking into account the performance and export plans of the factories. The instructions are formulated to avoid different interpretations and flaws in the golden signature.
But a month after the meeting, the Minister of Industry announced the formation of a steel committee to determine the price and stressed that the law allows steel products to be offered on the stock exchange and all producers must sell all their products according to the steel rules on the stock exchange. Therefore, from next week, the Steel Committee will hold a meeting to balance the supply of steelmakers on the stock exchange and balance its price in the market.
Finally, Alireza Razm Hosseini announced yesterday the base price of steel ingots on the stock exchange based on 70% of the CIS price, which is contrary to the price set in the method of organizing the supply and demand of the steel chain. Razm Hosseini, meanwhile, recently announced that setting base prices was the reason for the rise in steel prices, and stressed that it was not clear on what basis these numbers were set.
He also blamed the Ministry of Economy for the increase in steel prices, regardless of the effect of rising exchange rates and world prices and rents on the downstream steel distribution network.
The official announcement of this decision provoked many reactions, so that Hassan Qalibaf Asl, the head of the Exchange Organization, criticized this decision and stated that when a product is sold at a cheaper price than the real price in the Commodity Exchange, in addition to the manufacturer Losing, the shareholders of these companies, which are subject to equity shares, will also suffer.
Meanwhile, Pour-Ebrahimi, the head of the parliament's economic commission, also announced that mandatory pricing, in addition to creating rents, is a factor for the loss of producers and consumers, and stressed that not all items listed on the country's commodity exchange are subject to pricing.
The Commodity Exchange, as the executive body of this decision, did not comply with the order of the Ministry of Industry and referred the orderly intervention in steel pricing to the Supreme Council of the Commodity Exchange. He refused and referred the request of the Ministry of Industry to the Secretariat of the Supreme Council of the Stock Exchange.
These decisions are while one of the main slogans of Alireza Razm Hosseini since coming to power in the Ministry of Industry, removing monopolies and eliminating corruption and rent, while steel industry experts believe that this decision will create large rents in the industry.
In the meantime, the automotive industry, as one of the industries that is directly related to the steel industry, will definitely be affected by this decision.
"The experience of grammatical pricing has generally failed, and we see this clearly in the automotive industry, where the approved price has caused industrial losses as large as the automotive industry, and steel production in Iran in this respect with the automotive industry is comparable.” Mehdi Motaleb Zadeh, manager of inner production committee of part makers association told khodrocar reporter.
"Experience has shown that the pricing of strategic goods by the Ministry of Industry can’t be successful and leads to rents in that sector and reduces the incentive for companies to offer large and continuous offers on the commodity exchange.” He added.
"This pricing trend will create a crisis in the future of the steel industry and the automotive industry.” He continued.
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