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Smaller downstream steel producers face the greatest financing pressure even though large upstream companies control more liquidity, says Mehdi Koveiti, chief executive of Atieh Foulad Naghsh-e Jahan Investment Group.
Speaking at the Iran Transaction event, he said raw materials account for about 80% of downstream producers' costs, with wages and conversion costs making up the remaining 20%. Larger upstream companies generally have stronger access to banks and credit.
Koveiti said supply-chain finance should connect these resources with the businesses that need them most. He identified three main objectives: reducing financing costs, lowering credit risk and shortening the time required to turn receivables into cash.