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Simulation of the Price Cycles of Steel in Iran & Analysis of the Effects of Foreign Policies Using System Dynamics

Farzamfar, Arshia | 2019

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 52059 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Bahramgiri, Mohsen
  7. Abstract:
  8. Price cycles of metals have always been a major factor in making decisions for those actively participating in the market, among which steel, due to its nature and influence on economy and society, is of utmost importance. Therefore, the study and analysis of the steel market and understanding the contributing factors on price and potential policies affecting decisions are imperative.In this research, a model based on demand, supply, and other contributing factors on price has been developed in order to help with the analysis of price cycles and the effects of different policies as well as outside factors such as foreign policy effects. In order to do so, the literature of the topic both on a global and local scale has been reviewed, and a system dynamics model has been developed with the help of several related models from similar researches, as well as the inclusion of other related variables. Afterwards, validation and verification of the model is carried so as to justify reliability of the proposed model, after which the steel market in Iran is simulated in different multiyear scenarios, the results of which are demonstrated. Simulations shows that continuance of current status would result in higher price fluctuations and would see an increase in the tendency to produce as opposed to import. Moreover, it is shown that current production capacity is sufficient to address the demand as well as provide another source of income due to increase in exchange rates with the help of export, that is, if sanctions do not interfere.Moreover, it is shown that changes in tariff will not necessarily result in changes in the price and the availability of free market would reduce the fluctuations in price and would require an increase in production capacity.Lastly, the effect of foreign policies such as sanctions is observed in the form of a reduction in price, and a multifaceted improvement in the general economic conditions of Iran, through an increase in demand and consumption of steel. Moreover, production would see a significant decrease as tendency to import would rise
  9. Keywords:
  10. System Dynamic Analysis ; Iranian Steel Market ; Economic Implications Sanctions ; Base Metals Volatility ; Sanction

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