IME Bids Farewell to Spot Market
Economy, Business And Markets

IME Bids Farewell to Spot Market

The Iran Mercantile Exchange has decided to gradually shut down the spot market (physical marker) by the end of the current Iranian calendar year (March 19, 2016) in a bid to pave the way for electronic trade at the IME, Mehr news agency reported.
“The move will be implemented in separated phases, in which several commodities will be removed from the spot market every quarter, so that by the end of the year, the spot market will effectively cease to exist,” said Hossein Panahian, head of the IME.
He added that the IME’s core policy is to expand the mercantile exchange through accelerating trade and reinvigorating trade systems, which is also expected to give a boost to the capital market.
Currently, IME’s trade system is based on two separated models, said Panahian. “The first one is auction, which is attended by sellers and buyers brokers, and the other one is carried out electronically,” he clarified.
“Increasing productivity, cutting down expenses, and enabling investor to have access to the IME trades is among the main reasons behind the move to eliminate the physical market. Also, developing financial instruments including expanding derivatives is only achievable, once the electronic platforms are set,” said Panahian, adding that “the procedure is very complicated and the project is being carried out by local experts.”
> Bullish Demand for Iron Ore
IME’s last trading in the week that ended April 29 was accompanied by the offering of 100,0000 tons of iron ore from Golgohar Mining and Industrial Company on the export trading floor, with the base price of $27 per ton. However bullish demand for up to 400,000 tons pulled up the price to the average of $31.15 per ton.  
Since 2012 when the iron ore prices substantially decreased, the extraction costs have been rather uneconomical and many mines in Iran, smaller ones in particular, have stopped their mining activities.


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