IME Logs $2.2b Monthly Trade

EghtesadOnline: An estimated 7.3 million tons of goods and commodities worth 599 trillion rials ($2.2 billion) were traded in the spot market of the Iran Mercantile Exchange in the calendar month ending Jan. 20.

News ID: ۷۸۷۶۷۶

24 January 2022

Compared to the month earlier, trade dropped 12% in volume and 10% in value, according to data seen on the IME website.

IME is a commodities exchange in Tehran founded in 2006 to host deals in farm, industrial and petrochemical products in the spot and futures markets.

On the petrochemical and petroleum floor, 1.629 million tons of goods worth 218 trillion rials ($780 milion) were sold to domestic and foreign buyers.

Commodities sold on this floor included 490,000 tons bitumen, 306,534 tons polymer products, 108,436 tons petrochemicals, 14,653 tons base oil and 415,000 tons vacuum bottom. The list also included 26,285 tons sulfur, 225 tons moisture insulation materials, 450 tons argon and 171,000 tons lube cut.

Trade via the industrial and mineral floor amounted to 5.724 million tons worth 372 trillion rials ($1.3b).

A total of 3.6 million tons of cement was sold via the IME last month -- almost one million tons lower on the month before. It was followed by steel with 1.33 million tons.

Traders also bought 26,911 tons of copper, 35,090 tons aluminum, 367,000 tons iron ore, 241,000 tons sponge iron, 133,340 tons zinc, 630 tons molybdenum concentrate, 500 tons coke, 42 tons precious metal concentrate and 23 kilograms gold ingot.

The IME Side Market hosted 43,899 tons of goods in the period. In this market miscellaneous goods are traded. There was no trade on the agriculture floor in the last calendar month.

Derivatives Market

At IME’s derivative market, 408,611 futures contracts worth 17.38 trillion rials ($62m) were undertaken. Underlying assets of the traded futures were agro products, namely saffron, pistachio, cumin, silver along with gold units.

Future deals included 390,403 “Negin Saffron” contracts worth 16.12 trillion rials ($57m).  Negin is considered the top  quality Iranian saffron.

Other derivative deals included 12,346 by futures backed by units of gold-based exchange-traded funds, 5,818 silver futures and 44 copper cathode futures.

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 also exchanged more than 39.1129 million commodity-linked certificates of deposit (CD) valued at 12 trillion rials ($42m). The CDs were backed by cement, gold coins, saffron, pistachio, raisin and cumin. Cement and saffron-backed CDs accounted for 86% of the total CDs traded in the month.

Commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by standard warehouse receipt issued by 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.