Trade at the Iran Mercantile Exchange reached 2,580 trillion rials ($9.5 billion) in the first half of current fiscal year (March 21-Sept 22), the highest since its inception in 2006.
Total trade shot up 87% compared to the first six months of previous fiscal year, the IME website, imereport.ir, reported.
IME is a commodities exchange in Tehran hosting deals in farm, industrial and petrochemical products in the spot and futures markets. Steel, aluminum sponge iron, copper, bitumen, petrochemicals, sulfur are also traded.
The jump in spot market deals was the main driver of overall growth in the six months. It hosted commodities worth 2,460 trillion rials ($9.1b), registering 110% annual growth. Commodities weighing 26 million tons changed hands in the spot market, up 55%.
Sizeable growth in the spot market is partly due to cement trade after factories were obliged by the Industries Ministry to sell their products only through the IME.
Commodities traded on the mineral and industrial floor increased 165% in volume and 110% in value y/y. Trade via this section in H1 weighed 16.7 million tons worth 1,331 trillion rials ($4.9b).
On the petrochemical floor, 2.6 million tons worth 640 trillion rials ($2.3b) were traded while the petroleum area handled 6.5 million tons worth 460 trillion rials ($1.7b).
Derivatives Market Down
Unlike the spot market, data showed that trade in derivatives declined in H1. An estimated 3.46 million derivative contracts worth 60.76 trillion rials ($225 million) changed hands in the period, down 57% in volume and 41% less in value compared to the first half of last year.
Derivative instruments included 3.4 million futures worth 50 trillion rials and 18,000 options contracts valued at 10 trillion rials.
In addition, the IME hosted 7.8 million standard salaf contracts worth 7.34 trillion rials. A salaf contract is an Islamic contract similar to futures with the difference being that the total price should be paid in advance.
A total of 50.79 million commodity-based certificate of deposits worth 35.7 trillion rials were sold in the said period.
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 such a commodity. CDs securitize a company’s product inventory and offer buyers easy ownership of goods without the hassles of storage and insurance.
The IME has become more attractive in recent months as the government encourages manufacturers to offer goods in this market. Earlier, Mohammad-Sadeq Mofateh, a deputy minister of industries said the government is determined to expand the scale and scope of IME trade.
“The ministry seeks to offer [more] goods via the IME. Apart from diversifying goods, conditions will be created for major buyers to enter the market,” he said.
