Developing modern financial instruments in Iran Mercantile Exchange (IME) could significantly enhance price transparency and increase competitiveness in the iron ore market, an IME report quoted board member of Iron Ore Producers and Exporters Association, Mehrdad Akbarian, as saying.
“Introducing new financial instruments including Salaf – Islamic financial instrument – could help improve the iron ore market,” Akbarian suggested.
“Demand is always higher than supply on the export trading floor, leading to competitive iron ore prices,” said Akbarian, noting that the IME provides a suitable platform for iron ore exporters as demand is generally lower than supply in the local markets.
He also suggested offering iron ore in smaller quantities and providing non-cash financial services at the IME in a bid to attract more buyers to the market.
The iron ore market has been under significant pressure from a global fall in iron ore prices over the past year, necessitating practical strategies to stimulate the local iron ore market.
The West Australian government has based its budget assumptions on conservative iron ore price estimates and changed the methodology it uses to calculate the crucial forecasts after the plummeting price for the key export plunged the state into its first budget deficit in 15 years, RFA Weekend reported.
