IME Logs $1.8b Trade in 1 Month

EghtesadOnline: More than 2.92 million tons of goods worth 406 trillion rials ($1.8 billion) were traded at the Iran Mercantile Exchange in the last Iranian month to May 21.

News ID: ۷۸۶۴۸۱

24 May 2021

The deals increased 6% in volume and 16% in value compared to the month before, the IME public relations website reported.

It said monthly trade of 400 trillion rials is a record an IME trade.  The market is a commodities exchange in Tehran founded in 2006 to handle trade in farm, industrial and petrochemical products in the spot and futures markets.

Trade in the month mostly included industrial and mineral products reaching 1.46 million tons worth 232 trillion rials ($1 billion).

Steel topped the list with 1.19 million tons followed by 239,000 tons iron ore, 12,780 tons copper, 11,690 tons aluminum, 10,000 tons sponge iron, 1,000 tons zinc, 480 tons molybdenum concentrate, 400 tons coke and 250 tons of lead.

Trade on the petrochemical and petroleum floor reached 1.449 million tons worth 171 trillion rials ($777 million).

According to IME data, commodities in this category included 412,630 tons of bitumen, 238,686 tons polymer products, 155,372 tons petrochemicals, 12,238 tons base oil and 490,300 tons vacuum bottom. The list also included 4,450 tons sulfur, 350 tons argon, 132,500 tons lube cut and 150 tons moisture insulation materials.

The IME Side Market traded 11,505 tons of goods in the period.  There was no information about agriculture trade.

Derivatives

In the IME derivative market almost 718,000 futures contracts were signed worth 10.738 trillion rials ($48m). Underlying assets of the futures trade were farm products, namely saffron, pistachio, cumin and silver. Deals in silver futures were reported at 58,295 worth 1.11 trillion rials.

A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.

Traders exchanged more than 7.01 million commodity-linked certificates of deposit (CD) at the IME in the month valued at 4.75 trillion rials ($21m). The CDs were backed by gold, saffron, rice, pistachio, raisin, cumin and dates.

With 4.41 trillion rials ($20m) the gold-based CD topped the list in value terms and investors exchanged 4.489 million gold CDs in the period.

Other CDs included 2.5 million for saffron, 33,515 rice, 5,554 pistachio, 3,300 for dates, 4,059 raisin and 5,871 cumin certificates.

Commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by standard warehouse receipt issued by the warehouses certified by the Securities and Exchange Organization, the Iranian capital market regulator.

Selling a CD in the primary market means selling the stored or deposited commodity by the owner, and buying it means buying of such commodity. CDs securitize a company’s product inventory and offer buyers easy ownership of goods without the usual hassles of storage and insurance.