IME Spot Market Trade Hits $2b in One Month

EghtesadOnline: More than 7.23 million tons of goods worth 599 trillion rials ($2.1 billion) were traded in the spot market of Iran Mercantile Exchange in the last calendar month to April 20.

News ID: ۷۸۷۸۳۴

27 April 2022

This was up 163% in volume and 71% in value, respectively, from the same month the year before, the IME public relations website reported.

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.

Trade in the mentioned month included industrial and mineral products weighing 5.74 million tons worth 338 trillion rials ($1.2b).

Cement topped the list with 4.029 million tons followed by steel 1.024 million tons, iron ore 353,000 tons, sponge iron 260,500 tons, copper 28,200 tons, aluminum 55,400 tons, coke 450 tons, molybdenum concentrate 450 tons, lead 700 tons and gold 49 kilograms.

Trade on the petrochemical and petroleum floor reached 1.372 million tons worth 248 trillion rials ($901 million).

The IME said commodities under this category included 335,276 tons of bitumen, 312,673 tons polymers, 132,265 tons petrochemicals, 14,594 tons base oil and 412,800 tons vacuum bottom. The list also includes 20,695 tons of sulfur, 330 tons argon and 141,990 tons lube cut.

The IME Side Market hosted deals for goods weighing 110,781 tons in the period. No deal was reported on the agriculture floor.

Derivatives Market

In the derivative market, more than 267,000 futures contracts changed hands worth 11.55 trillion rials ($42m). It was much lower on the same month a year ago when almost 2.1 million futures contracts changed hands worth 31.98 trillion rials ($116m).

Underlying assets of the traded futures included saffron, pistachio, cumin, silver and units of gold-based ETFs.

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 75.266 million commodity-linked certificates of deposit (CD) at the IME during the month worth 9.28 trillion rials ($33.7m). This was a whopping 921% and 56% rise, respectively, in volume and value over the corresponding month last year.

The CDs were backed by gold coins, cement, saffron, rice, pistachio, raisin, cumin and date.

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 capital market regulator.

Selling a CD in the primary market means selling the stored or deposited commodity by the owner, and buying 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.