Engineer Saeed Zakai in an interview with Inpia about the current situation of the raw materials market Polymer and stagnant conditions after a period of inflammation and intense competition explained: The nature of the raw material market in Iran this That is, when the buyer expects an increase in the price of currency, demand increases, […]
Engineer Saeed Zakai in an interview with Inpia about the current situation of the raw materials market Polymer and stagnant conditions after a period of inflammation and intense competition explained: The nature of the raw material market in Iran this That is, when the buyer expects an increase in the price of currency, demand increases, and when there is an expectation of a decrease in the price of currency, applicants postpone their purchase as much as they can, thus reducing transactions. This is more or less the case in all industries.
Member of the Board of the National Association of Industries Polymer Iran attributed the recession in the market to various factors “The most important factor is the exchange rate, but other factors such as complex bureaucracies in imports, export problems and barriers to business development also contribute to this recession,” he said.
He said that in general, any factor that makes production and exports difficult and reduces the incentive to buy, is effective in creating a recession. He added: “Recently, the free dollar exchange rate has been lower than the half dollar, and because the base purchase rate of raw materials based on the opaque formula of complementary industries is based on the half dollar, purchase prices for us are much higher than world prices.” This deprives producers of export power, and this can lead to a recession.
Zakai emphasized: Of course, this recession is not true for all polymers , grades that supply from Demand is lower or supply is close to demand, strongly influenced by dollar conditions, material trade flows and supply engineering. We see these conditions in most polypropylene grades. In a situation where prices are expected to fall due to the fall of the dollar, abnormal conditions can definitely cause up to 75% competition in some PP grades!
Logically, the need for imports is inevitable when the supply of products in the market is less than the demand. But when the import license is subject to the approval of those who make the most of the competition, how can one expect the market to balance, and versions such as grading, clearing the issue, and serious inconvenience to the manufacturer. In addition to imports, there is a requirement for petrochemicals to increase the production of inflamed grades in proportion to the amount of inflammation ( In contrast, grid engineering) and control of market traders is only possible by increasing transparency through the value-added system connected to the banking system. Global experience has shown that instead of creating a variety of parallel control and monitoring systems, upgrading the tax and banking systems and connecting them to each other has been the best way to manage market traders.
The head of the technical commission of the National Association of Industries Polymer Iran said: In the current situation, many grades are not competitive Consumption and purchases will decrease Petrochemicals should be customer-oriented like complementary industries, and As they used to make huge profits from the fierce competition in the market, now that it is a fertilizer market, consider incentive methods such as discounts, timely sales, etc. for buyers.
Zakai pointed out: One of the problems of the commodity exchange in Iran is that its mechanism is only increasing. For example, the base price starts at about 5% below the global price and goes up with competition, but there is no way to reduce prices during a recession. How is it that the price of oil on the world oil exchange is negative, but petrochemicals should only be Make a profit from the competition (up to more than 125 million dollars this year) but never experience losses or even lack of profit like the complementary industries!
The economic activist continued: If the industries petrochemical are complaining about the decrease in purchases, now is the best time to Offer a timely sale discount as well as a premium contract. In a premium contract, pre-purchases for future months can be made based on the price discovered on the stock exchange on that date plus or minus the percentage agreed at the time of the contract. This contract benefits both the buyer and the seller and reduces the risk of drastic changes or decreases in the future, at least for part of the consumer’s definite needs.
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