In recent weeks, the Iranian steel industry has been grappling with a significant surge in sponge iron prices, which have increased by 15-20% during the winter months compared to the previous fall. Prompting concerns among manufacturers and consumers alike. Analysts attribute this increase to a combination of rising production costs and fluctuations in raw material availability, which have tightened supply chains. This price hike is coupled with a nearly equivalent decrease in supply, causing concern among industry stakeholders. Experts warn that if the supply continues to drop by about 10%, prices could rise by an additional 10-15%.
Sponge iron, a crucial input in steelmaking, has seen its price climb sharply, leading to worries about potential ripple effects throughout the construction and manufacturing sectors. Industry insiders report that steel producers are facing higher operational costs, which could eventually translate into elevated prices for end products.
Adding to these difficulties, the National Gas Company of Iran has emphasized the urgent need for billions of dollars to upgrade gas infrastructure to meet industrial demands. Without this investment, supply chain issues could worsen, making it harder for manufacturers to operate at full capacity.
The Iranian government has acknowledged these market dynamics and is considering measures to stabilize prices. However, stakeholders remain cautious, as prolonged high prices could stifle demand and slow down economic growth.
As the situation evolves, market participants are keeping a close watch on policy developments and international market trends that could further impact sponge iron pricing in the months ahead.
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