CEO of Iran Mercantile Exchange (IME) Hamed Soltaninejad on the Fourth International Conference on Iranian Iron Ore said that Iron’s ore will be offered on domestic trading floor of the IME within "Decade of Fajr" (January 31- February 10).
On the fourth international conference on Iranian Iron Ore, CEO of Iran Mercantile Exchange outlined benefits of implementation of Article 37 of the law of removal of barriers to competitiveness and improving the country’s financial system, history of trading iron ore on the IME and other world commodity exchanges.
According to the report by the IME’s International Affairs and PR, senior government officials and officials of the Iranian iron ore market attended the fourth international conference on Iranian Iron Ore.
The CEO of the IME stated that implementing clause 2 of Article 37 of the law of removal of barriers to competitiveness and improving the country’s financial system, facilitating trade of the excess of commodities offered on the domestic trading floor on the export trading floor along with developing export markets for iron ore and increasing the share of private sector are among the IME’s program in this field.
Pointing to the most important plans of the IME regarding development of iron ore industry, Soltaninejad named launching trade of all commodities existing in the value chain of Iran's steel industry, preparing the groundwork for using financial instruments for iron ore mines, as well as launching hedging instruments in this market as the IME’s future initiatives.
According to Soltaninejad, iron ore producers can use the IME’s financial instruments such as SALAF contracts to sell their products well before they are produced, a turning point in industry.
Advantages on implementing the law of removal of barriers to competitiveness
The CEO of the IME stated that the law allowed the government to use a variety of incentives such as the IME’s capacity to process raw materials and transform goods with a lower added value to goods with higher added value. Recognition of oversupply in the domestic market to benefit from the export exemption for listed commodities by the IME including iron ore is subject to three offerings in a row at a proper price.
History of Iron ore trades on global commodity exchanges
Soltaninejad added that iron ore is being traded in Chicago, Dalian and Singapore commodity exchanges in cash and derivatives contracts. The trading volume of Singapore's iron ore futures and options in 2015 totaled 7.33 million contracts and the trading volume of Dalian’s iron ore in 2015 is about 260,000 contracts and in 2016, is above 342 million contracts. Also, the trading volume of Chicago’s iron ore futures contracts in 2016 is about 202,000 contracts and in 2016 and the trading volume of its options contracts is over 72,000 contracts.
He said that considering the volume of iron ore contracts on these exchanges, it is obvious that by increasing the volatility in the iron ore price in global markets, the derivatives contracts market is booming in the world exchanges, so that based on statistics, standing after rebar, iron ore has occupied the second position in the trading of derivatives contracts.
According to Soltaninejad, in the IME, the first offering of iron ore was on September, 7, 2011, by offering 200,000 MT of iron ore by Gol Gohar Iron Ore Mine on the export trading floor. From 2011 up to now, a total of 12.2 million tons of iron ore worth $712 million is traded in the IME and iron ore trading volume has increased from 1.5 million tons in 2011 to 1.6 million tons in the first 9 months of the current Iranian calendar year (started on March 20, 2016).