Global fuel for the stock market

About 60% of the stock market value is held by commodity-based companies. In recent weeks, due to economic changes in some countries and the end of the corona outbreak in various parts, the customs statistics of the world’s economic giants, including China, reveal an increase in purchases and consumption of basic metals, so that global prices of these products increase sharply. Is on the move. Experts believe that this trend will continue given the current state of world markets and the decline in the global price of the dollar. This situation indicates that the conditions of stock exchange commodity companies and companies that produce these products domestically enter a new phase following the change in global prices, and the impact of the stock prices of these companies on the global price of metal products increases. The fate of metal groups is tied to global prices, so it looks like we will see serious changes in the way these groups trade in the coming weeks.

Copper advancement in the global market

Commodity prices are growing beyond expectations, and this unexpected growth, if sustained, will change the dollar profitability of listed companies as well as the country’s currency balance. Mehdi Afnani, a stock market expert, told “Dunya-e-Eqtesad” in this regard: “Last week, the world price of copper reached new heights and reached new numbers.” Estimates suggest that the growth of copper prices after the new year will also be upward. Rising global copper prices have a significant impact on stock exchange-oriented companies. The positive outlook for the world price of copper, along with the stability of the exchange rate in the range of 24 to 26 thousand tomans, gives its shareholders a considerable profit. Therefore, given the positive movement of copper prices in global markets, it seems that these companies will have a year of high sales next year.

Referring to the situation in the oil market and its impact on the Tehran Stock Exchange, he states: The passage of the price of a barrel of oil (Brent) above the border of $ 52 (9-month ceiling) clarifies two main issues. The possibility of increasing oil supply by Iran is one of the important issues that various statements are heard in this regard, which is important for Iran in different ways. Afnani continues: “Corona issues and changes in Iran’s international situation are taking the oil situation into another phase.” These two important factors maximize the possibility of oil prices stabilizing in the range of $ 50 to $ 60 per barrel; However, the dollar exchange rate in the 1400 budget also plays a decisive role in the Iranian oil market and its industries and subsidiaries.

Continuation of the upward trend of prices

“Aluminum, lead, zinc, steel and minerals will move upward for next year as the corona disappears,” said the stock market expert on the outlook for global metals. China is currently looking to buy these metals. An event that can lead to the growth of world prices of these metals and ultimately the growing trend of their prices in the Tehran Stock Exchange. He emphasizes: the growth rate of prices of these metals will not reach the growth rate of copper. In the case of steel companies, the situation is such that it seems that the steel industry will present a positive performance report at the end of the year, considering the problems of the domestic sales chain and the end of steel sales margins.

In the end, Afnani states that the market has not weighed much more than the $ 11,500 tomans so far: At present, the only issue that threatens the capital market is the dollar rate in the budget of 1,400 tomans. The capital market can not adapt to the dollar below 20 thousand tomans, but if the parliament agrees with the dollar 11 thousand tomans, the stock market will react differently than expected and there is a possibility that the stock price will fall. There is a lot of talk about the 11,000 Toman dollar, but the evidence shows that the companies’ performance reports will be closed by the end of March based on the current dollar exchange rate.

China Program for Copper

Jamshid Asiai, another capital market expert, examines changes in the prices of basic metals and tells the “World of Economics”: “In the last month, the prices of commodities, especially metals, have risen sharply, due to various factors.” Copper is the first metal to recover from a downturn caused by the Crohn’s disease pandemic (falling from 6,200 to 4,600) and traded up $ 8,000 at the close of trading on Friday, reaching a 95-month high. Given the prevalence of the corona in South America and the rich copper resources in those areas, international concerns about the supply of copper, especially from Chile, its largest producer, continue, and this decline in supply is leading to higher prices. “The Fitch International has listed two factors in increasing copper demand in 2021; One is the increase in demand for more energy, the construction and expansion of the automotive industry worldwide, and another important factor in China’s economic stimulus measures. This means that China has increased funding for infrastructure projects for the post-Corona era, a decision that will increase demand for copper, so a price of $ 8,500 and above is quite likely for the metal.

Lead and zinc market optimisms

Referring to the outlook for the global lead market, Jamshid Asiai states: In 2020, compared to 2019, due to the outbreak of Corona virus, the activity of many lead and zinc mines decreased and it is predicted that in 2021, due to the reduction of quarantine and There is optimism about the eradication of the corona, there will be a supply deficit and this supply deficit will continue until 2025, which will lead to price growth of these two metals. According to the statista, the average price of zinc in 2019 and 2018 was in the range of $ 2300. While there was a surplus of supply in those years, a price jump in zinc is to be expected. According to Reuters, Shanghai’s reserves are currently at 89,188 tonnes, down from 81,000 tonnes in March, indicating strong demand in global markets.

“Despite declining demand for cars last year, it seems that this sector has improved and due to high demand for trucks and commercial vehicles, their sales increased by 11.6% in June, so imports of refined zinc,” he said. China has been growing and continuing over the past two months. According to the ILZSG, lead and zinc demand will increase by more than 4.4% and 6.6% in 2021, respectively. The construction of new capacities for the zinc smelter in China has been so dramatically reduced that we will have production constraints that, along with growing demand, will lead to sharp price increases. Lead prices for lead and zinc at quarterly, one-year and two-year maturities are higher than their cash prices (contagious), indicating expectations of lead and zinc price growth.

Repetition of corporate profitability

Regarding the situation of the iron ore and steel market, Jamshid Asiai states: “On the one hand, the iron ore market is due to increased demand for Chinese imports and investment in the country’s infrastructure and economic stimulus, and on the other hand due to concerns about iron ore supply from Brazil and Australia.” There is a dazzling leap forward. In the case of the steel market, the situation is different than before. The domestic market is severely in recession and the demand for steel ingots in the commodity exchange is extremely weak. If the Ministry of Silence abandons the strict regulations on steel exports, there will be a great opportunity for the country’s steelmakers such as Foolad, Fakhouz, Kaveh and Hormoz.

“Evidence suggests that Iranian steelmakers are looking for $ 490 to $ 500 per tonne of export billets, while foreign customers have agreed to $ 470 for Iranian steel ingots,” he said. This expert emphasizes that the companies’ profit for the first six months of this year is 156 thousand billion Tomans, which has increased by about 120% compared to the previous year: in the second quarter of this year, this profit increase is 188% and the average export dollar rate in the first six months is about 17,500 It has been Toman that with the stability of the half dollar exchange rate and the growth of world prices in the second half of this year, this profit will be repeated and we will even see the failure of the profitability record in commodity-based companies.

The best investment groups

Tehran Stock Exchange is deliberately commodity-based, so the activity and profits of listed companies are directly dependent on world prices. This is what Alireza Tajbar, a capital market analyst, tells the “world of economics” and states: “Companies listed on the stock exchange produce products that have a favorable export market, so with the increase in global prices, the profitability of these companies increases.” He states: The increase in world prices of metals affects the profits of metal companies in three ways. The stabilization of the dollar price above 20 thousand tomans in the second 6 months of the year (while the dollar rate was below 20 thousand tomans in the beginning of the year), the global devaluation of the dollar that caused commodities to experience positive events and the third thing that can not be easily ignored. , Is the selling rate of products that are expected to have openings in their selling rate; So that we will see extensive changes in both the sales rate and the sales of companies by the end of the year. Accordingly, groups that depend on global prices are the best groups to invest in and benefit from three aspects.

Reasons for rising global metal prices

Tajbar discusses the reasons for the increase in the global price of metals and says: The price of metals has increased for two main reasons. The declining global price of the dollar and rising demand from various countries have boosted the metals market. Accordingly, copper and methanol have seen higher price increases. Copper also rose in price due to increased demand for hybrid and methanol machines due to a new maritime law that replaced fuel oil. “Metals and commodities have entered a rising trend, and this upward trend will continue with the distribution of vaccines and the end of the corona outbreak,” he said. But it is unlikely that the jump in oil prices will continue. The production of many companies is justified and they enter the production cycle, and the excess supply will prevent the price increase.

According to Tajbar, rising global prices work differently for different companies. “Lead and zinc groups benefit more from rising global prices than other groups,” he said. The situation is the same in aluminum stock. Given that there is always demand for this group, a positive price trend is guaranteed, although this group is struggling with the risk of increasing energy carriers, but given that the risk of increasing energy carriers for next year has been eliminated, this group of There are many benefits to investing. “The capital market accepts neither the budget, nor the price of the dollar in 1400, nor the price of oil,” he said. Market transactions are analyzed in proportion to price changes by activists, so the stock price of $ 22,000 is currently a justifiable figure.