Iran Mercantile Exchange plans to start trading in domestic iron ore pellet, concentrate

Source: PLATTS

The Iran Mercantile Exchange plans to begin trading in domestically produced iron ore pellet and concentrate, IME Managing Director Hamed Soltani-Nejad was quoted as saying by local media websites on Monday.

The IME also planned to trade imported iron ore in the future, he added.

Iran’s iron ore imports were insignificant, however, though a market analyst said Monday that they were expected to grow as steel production capacity increases.

Golgohar, Iran’s largest iron ore miner, is the first company to be approved by IME for trading, Managing Director Naser Taghizadeh was quoted as saying on the exchange’s website.

“At this stage, a portion of Golgohar’s pellet and concentrated iron ore output will be traded on IME in lots of 50,000 mt [each], but in the next stage the company is going to trade sponge iron through IME,” Taghizadeh said.

IME tried to launch trading in domestically produced iron ore in 2013, but was not successful owing to a lack of acceptance by the local steel industry, a market participant said Monday.

“The domestic price of iron ore lump, concentrate, fines and pellet is determined by the government, based on the average price of billet trading on IME. Therefore the iron ore price depends on the steel price,” he explained.

“Floating of pellet and concentrated iron ore prices was expected to increase the production cost for the steel industry to some extent, but not immediately. It will not affect any of the current contracts between miners and steel producers,” he added.

Source: PLATTS