The government is intervening in the pricing of base metals in the local market, again.
At the behest of Industries Minister Mohammad Shariatmadari, his deputy Hassan Younes Sinaki has recently proposed new formulas for calculating the base price of steel, copper and aluminum at Iran Mercantile Exchange.
The three new formulas are as follows:
Steel base price: Official exchange rate multiplied by 95% of Persian Gulf FOB
Copper cathode base price: Official exchange rate multiplied by premium (in USD) + London Metal Exchange price (in USD)
Aluminum ingot base price: Official exchange rate multiplied by premium (in USD) + LME price (in USD)
The steel formula, as the official’s primary concern, is set to replace the old formula of SANA forex rate multiplied by Metal Bulletin’s 15-day average CSI and Black Sea price.
April 08, 2018 17:24
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Iran Gov’t Proposes New Base Metal Pricing System at IME
At the behest of Industries Minister Mohammad Shariatmadari, his deputy Hassan Younes Sinaki has recently proposed new formulas for calculating the base price of steel, copper and aluminum at Iran Mercantile Exchange
The rationale for the new pricing mechanisms is that steel, copper and aluminum producers’ production costs are largely independent of foreign currency fluctuations, considering that they barely import any raw materials and also enjoy subsidized energy
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