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After weeks of uncertainty and lack of details, Iran's steel industry has finally received clear guidance on the operation of the "secondary foreign exchange market" established by the central bank. This market aims to allow non-oil exporters to sell their foreign exchange earnings to importers of consumer goods. 35P115 Grain oriented electrical steel, Industry insiders generally believe this move will be a major transformation affecting the international trade landscape of Iranian steel.
According to the latest consensus reached between Iran's Ministry of Industry, Mining and Trade and the Central Bank (CBI), exporters across the entire steel industry chain must channel a certain percentage of their export revenue into a new foreign exchange market. Settlement will be made at both the official exchange rate (1 USD = 70,000 tomans) and a negotiable rate (currently approximately 1 USD = 108,000-110,000 tomans) to meet the hard currency needs of domestic industries. Specific transactions will be executed through the Central Bank's NIMA platform and the ISC system overseen by the Ministry of Industry.
Industry insiders expect this move to have a profound impact on the steel supply chain, but market opinions remain divided. As the policy has just been released, many market participants are still digesting the details. Some, however, hold a cautiously optimistic view of the reform. Industry insiders say the new policy may significantly alter the market structure. For example, exporters of rebar and wire rod must return foreign exchange at a 2:8 ratio, using both official and negotiable exchange rates. 35P115 Grain oriented electrical steel, This will significantly reduce the complexity of operating in the free foreign exchange market. Under this arrangement, exporters' settlement paths will be more controllable; domestic steel mills can also better plan production when importing raw materials, without excessive concern about foreign exchange shortages. At the same time, a more transparent settlement system will help companies organize production and sales with more realistic costs.
However, this mechanism is considered to offer limited support to the raw material supply chain. Market analyst Keyvan Jafari Tehrani points out that mining companies are dissatisfied with the low negotiable exchange rate settlement ratio. 35P115 Grain oriented electrical steel, He also notes that the government's desire to increase added value in the supply chain is logically sound. He adds that recent events, such as the brief ban on concentrate exports from Bandar Abbas in Hormozgan province, reflect the risk of supply chain disruptions caused by government intervention.
Legal experts also emphasize that the successful implementation of this mechanism hinges on the full cooperation of exporters and the transparency of the transaction system. Furthermore, whether the supply and demand in the secondary foreign exchange market can maintain a balance is another uncertain factor.
