The competition between the two major groups of base metals and petrochemical products in the Tehran Stock Exchange on November 10, 2023, has been accompanied by a relative advantage for base metals. On this day, the base metals group recorded a return of 2.91 percent, while the chemical products group faced a growth of 2.78 percent. This situation indicates that both groups are in the positive range, but base metals have had slightly higher returns.
Analysis of Global Oil Market Situation
In the global market, the price of Brent oil has reached about 91 dollars and the price of American crude oil has reached about 85 dollars. This decrease in oil prices will have different impacts on petrochemical companies. Contrary to initial expectations, the cheaper oil does not necessarily mean a reduction in profits for all companies in this group. To analyze the effect of this change, three important issues must be separated: feedstock costs, product prices, and profit margins.
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The decrease in the prices of hydrocarbon raw materials can lower the production costs of some companies. However, if the global prices of petrochemical products decrease simultaneously, sales revenue may also come under pressure. Therefore, the difference between the product selling price and the feedstock and production costs is a more important criterion for assessing profitability.
Status of the Base Metals Group
In the base metals group, companies such as National Iranian Copper Industries Company (NICICO), Steel, and Khuzestan Steel Company (Foolad Khuzestan) are among the most important symbols whose behavior is significant for evaluating the industry status. NICICO, due to its activities in the copper chain, is more dependent on global copper price changes. Meanwhile, Steel and Khuzestan Steel are influenced by the prices of steel products, energy costs, and the domestic and export market situation.
On November 10, the base metals group had no negative symbols, indicating that this group has generally performed well in recent transactions. In contrast, in the chemical products group, a greater number of positive symbols are observed, indicating significant growth in this industry.
The decrease in oil prices can have different messages for petrochemical companies, but for the base metals group, energy costs and global metal prices are very important. Changes in global prices of copper, steel, and aluminum can strengthen the sales revenue of metal companies, while a drop in global metal prices may limit the profit margins of producers.
Ultimately, to examine the status of these two groups, the trend of global metal prices and the demand from consumer industries must also be considered. Additionally, to more accurately evaluate the status of large symbol transactions, merely having positive stock prices is not enough; other factors such as trading volume, transaction value, and demand stability must also be taken into account.
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