Tue 23 Jul 2019 10:05 0 702


The exchange terror in polymer market

The exchange terror in polymer market
The downfall in dollar exchange rate along with decreasing trend in the amount of trades in stocks market, are two signals that warn about an even deeper recession and result in a longer recovery time.

According to wikiplast, the downfall in dollar exchange in free market will result in a decline in governmental exchange rate as well, which balances the increasing prices in stocks market.

Dollar is declining! This statement alone can inject worries and confusion into the market. Nobody knows whether to buy or sell or even stock. Nobody knows what will happen if the exchange rate keeps falling.

To give a reasonable answer, one must know the future of the exchange rate, which is almost impossible.

We can say for sure that most people in the market are worried that the decreasing trend will continue. It, however, has caused the expectations for governmental exchange rate growth to cease for the moment. Sometimes the governmental exchange rate is lower than the free exchange rate.

A brief growth in prices can be seen in the past few days, but the decreasing trend will keep on tomorrow.

Although the data is sometimes ambivalent, the psychological atmosphere of the market is influencedby the recent changes in exchange rate

However, no definite prediction can be made until the new base prices are declared. We can roughly say that even if we see a rise in prices, it will not be a significant one.

At the moment of writing this report, the governmental exchange rate for a Dollar is 116,000 IRR which as just over the previous rate of 115,770 IRR.

The global rates, however, have a slight rising trend. Therefore the possibility of increasing prices is not fully eliminated. But we have to wait and see.

According to the afore-mentioned, no dramatic fluctuation is anticipated for the prices in the following week and they will most likely remain rather unchanged.

But the psychological atmosphere is promising a low interest in buying, and this is an important factor in the current situation. Exporting polymer product will be less appealing as well and if prices do not fall, we shall witness considerable changes in exports.

The amount of trades experienced over 10% of downfall to reach about 45000 tons. This means a return to “harsh recession” state for the market.

Therefore, the already weak market will be negatively impacted by the psychological atmosphere.
Now, the only possible reaction is to wait.

Although the prices have a tendency to drop, no dramatic fluctuation is expected and we can hope for stability in the market.

It is not reasonable to think the recession will be over soon. But the weak trends are not expected to last long either. We can hope for a better situation when the exchange rate has been stabilized.

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