Record of price jump of steel sections; Investigating the growth percentage of cans and pipes under the influence of recent tensions

In less than seven months, the price of construction cans in the iron market has increased by nearly 88%, and the price of furniture cans has more than doubled. In the same period, that is, from the days before the start of the conflict in March 1404 to the end of September 1405, the free market dollar became more expensive by about 40%. The distance between these two numbers shows that the jump in the price of steel sections cannot be explained only by the exchange rate. A large part of it comes from the sheet ring in the steel chain.

For a manufacturer that makes parts, metal furniture or light structures, this fluctuation is no longer just market news. When raw material rates move 20-25% in a month, a fixed-price contract can wipe out the entire profit margin of an order. For this reason, the daily monitoring of the profile price for production units has turned from a buying habit to a budgeting tool.

basis of comparison; From the days before the war until the end of September 1405

This report has been prepared based on the daily price series of two independent market sources, namely Ahan Price and the daily table of World Mining, and the exchange rate archive of the Gold and Currency Information Network. All numbers are reported per kilogram and as nominal growth; That is, the effect of general inflation has not been deducted from them.

Three milestones have determined the course of the market: the last trading days before the start of the conflict on March 9, 1404, the attack on Mobarakeh Steel and Khuzestan Steel on March 7 and 11, 1405, and the reopening of the market in early May. From the end of March to the end of April, the daily price tables were practically not published. Therefore, the growth of spring should be considered a leap of the opening moment, not a gradual process.

construction can; Nearly 88% growth in two waves

The construction can with a thickness of 2 mm and more, which is produced from black sheet, has followed a two-step path. Iron price data for 20 x 20 cans in Nikan factory and 40 x 40 cans in Paya, Isfahan, show a growth of 87.9 and 88.3%, and the reference rate of the world mining table has also reached 87.3% growth. The concordance of two independent sources makes this number one of the most reliable indicators of this period.

The first wave occurred in the reopening of Ardibehesht and made the rate 70-75% higher than before the war. After that, the demand slump brought the market down about 21% from the peak by July. The second wave came in September: from the end of August to the end of September, construction cans became more expensive by 24 to 27 percent and passed the spring ceiling. For a contractor estimating a shed, shed, or industrial style structure, the price of a 4x4 can during this period became a variable that invalidated the cost estimate every few weeks.

light box and sofa; The rate more than doubled

Thin sections have a different story. 20 x 20 furniture cans have grown by 107.2% in thicknesses of 0.7 to 1.5 mm; Nearly 20 percentage units more than the construction can of the same size. The root of this gap is in the primary material. Furniture box is produced from oiled sheet and 0.5 mm oiled sheet of Mobarakeh steel has become more expensive by 112% in the same period.

The remarkable thing is that the oil sheet was traded about 115% higher than before the war on the opening days of the market; It means even more expensive than today. The supply shock in this ring was transmitted faster and more severely, and the price of a can of furniture in the first days was 90.7% more expensive than before the war.

Industries such as metal furniture, shop supplies, auto parts and bicycle manufacturing have endured the most pressure from this gap. In these industries, the price of 2*2 cans is directly included in the finished price of each piece, and replacing it with another section usually requires changing the product design.

pipes; Side by side, not side by side

The black industrial seam pipe has almost replicated the path of the construction can. Sabri Factory's 2mm 2mm pipe and Kian Persia's 2mm pipe both grew by about 88%: about 67% in the opening and about 25% in the Shahrivar wave. This alignment is natural, as both products are powered by black sheet and have similar cost structures.

The 1 mm furniture tube of the Persian Gulf has moved in the same direction as the furniture can with 108.8% growth, and it shows the common dependence of these two products on the oil sheet. For galvanized pipe, a continuous pre-war price series is not publicly available. However, its raw material i.e. galvanized sheet has become more expensive by 109% in the same period and the galvanized pipe itself has grown by 16.4% from the end of August to the end of September.

Two waves, two engines; Spring supply shock and September exchange rate shock

The comparison of the two waves shows that the driving factor of the price was different in each stage. In the reopening of Ardibehesht, the open market dollar was about 6% cheaper than before the war, but the construction can was traded about 70% more expensive. The jump came from the supply side: the disruption in the production of two large steel units directly targeted the flat plate chain, which is the raw material for cans and tubes. Rebar, which is not fed from sheet, grew by only 20% during the same period.

But the wave of Shahrivar was a currency. The dollar rose by 20% this month and the construction can by 25%; Two numbers that are close to each other. In the same month, the black sheet moved ahead of the can by 2 mm with a growth of about 46%. This distance indicates that part of the sheet jump may not have been transferred to the prices of sections yet.

At the same time, the demand side remains weak. According to Ambassador Arjan, in the first five months of 1405, Mobarake Steel offered 1.63 million tons of products in the commodity exchange in 44 occasions, and 380 thousand tons of it remained without demand. Supply has returned, but prices have been kept higher by production costs and inflationary expectations rather than booming consumption.

What index should an industrial buyer look at in this market?

The experience of the past seven months has three clear lessons for purchasing units:

Oil sheet and black sheet rates in the data of this period are the leading indicators of the price of sections and its change has reached cans and tubes with a short distance.

A purchase contract in a fluctuating market should have a clear basis: factory, thickness, actual or theoretical weight basis, value added status and delivery location.

When the rate of the raw material is nearly doubled, each percentage of cutting waste ends up being proportionally more expensive.

At this point, it makes economic sense to transfer the processing steps to the supplier. For example, Sabaprofil, with six NC banded cutting lines and a cutting capacity of at least 50,000 pieces per day, performs the cutting of the part before delivery and takes the waste and workshop cost out of the customer's production line. In a market where price direction is difficult to predict, controlling these manageable costs is the real difference between maintaining and losing profit margins.