Production barriers are intensifying in Iran

In Iran, the rise in production costs due to increased billet prices, coupled with the potential for higher gas prices, has led to a significant uptick in the overall cost of manufacturing long steel products. In this situation, the producers of long steel products are facing the uneconomical production due to cost growth and the impossibility of reflecting this rate growth in the sales price due to the heavy recession in the consumer market, and this issue has led them to voluntarily reduce production. Reviewing the trading activity of rebar in the physical commodity exchange during the third week of August reveals a decline in transaction volume within this market.

The significant price difference between the free market and the stock market makes purchasing from the stock market economically unfeasible. This contributes to the ongoing market recession, as traders are hesitant to buy rebar at current prices from the physical market due to uncertainty about medium-term demand improvement and potential price growth.