Fundamental analysis of “Stran”/commodity exchange eliminated the risk of command pricing?

According to Tejarat News, before the establishment of the cement industry in Iran, the cement needed by the country was supplied from Russia and from Baku. Then Ray Cement Company was able to get the title of the first cement factory in Iran with the capacity of producing 100 tons of cement per day.

Now, however, this industry has made significant progress in Iran and has reduced the need for imports. Because the number of domestic cement companies answers the country’s construction needs and there is no need to import this valuable product.

The important point in examining the shares of cement companies is the fact that this product cannot be traded. Because with the high cost of transporting cement due to its high weight, the business of this product is practically not economical.

Also, since cement production does not depend on raw materials and advanced technology, and countries need this product for construction, generally countries produce their own cement internally.

Therefore, the trade of this product in the world is only four to five percent of its global production, and this number reaches only seven percent of the total cement production in the best case.

It should be noted that this figure is slightly different in Iran and statistics show that cement export in Iran is about 24% of the country’s production.

Cement industry conflicts with construction

It should be mentioned that the stagnation of the country’s construction in the past years due to the high cost of construction materials, the decrease in the profit margin of the mass builders and the decrease in housing demand from the people due to high prices are among the most important challenges of the cement industry in recent years.

This caused this product to face a decrease in demand and excess supply in the Iranian market in the past years, and cement companies thought about exporting their products.

On the other hand, the target markets of these companies abroad are not able to respond to it because the countries of the region are still struggling with the problem of construction stagnation caused by the war.

But the problem of lack of energy, which affects domestic production in a more serious way in the past years, is considered one of the other important risks of this industry. Because cement production is always affected by electricity cuts in summer and lack of gas in winter, and an industry whose progress was due to the abundance of energy and low prices of raw materials has faced a problem.

Poor record of Tehran Cement in the first month of 1402

Examining the monthly performance report of Tehran Cement shows that after the relative jump in production and sales in March, the company has once again approached its five-month production and sales average in April 1402.

According to the monthly performance report of Tehran Cement, the amount of production of this company decreased by 29% and reached 222 thousand 91 tons from 310 thousand 780 tons in March 1401.

It should be noted that this number was recorded at 220,376 tons during the same period last year. Based on this, Tehran’s cement production in April 1402 has increased by about one percent compared to the same period last year.

Further investigation of this report shows that this company was able to sell 220 thousand and 260 tons of its produced cement in the mentioned month and earn about 180 billion tomans from it.

It should be mentioned that the company’s sales in April 1402 decreased by 27 percent compared to March 1401 and increased by four percent compared to April 1401.

Of course, the decrease in the company’s income in this month was relatively less than the decrease in the company’s production amount, and this number has decreased by about 22% compared to the income of March 1401.

It should be mentioned that the income from the sale of Setran in April this year was more than 65% compared to the same period last year.

It should be noted that the majority of cement production and sales of Tehran Cement Company in April was in bulk form. According to the company’s announcement, the wholesale price of cement is 809 thousand tomans per ton.