Economy, Business And Markets

Rise in Mineral Export as Commodity Prices Surge

Rise in Mineral Export as Commodity Prices SurgeRise in Mineral Export as Commodity Prices Surge

The increase in value of Iran’s mineral exports during the first four months of the current Iranian year (March 20-July 20) was due to rise in commodity prices during the period, says Kamran Vakil, head of Iranian Producers and Exporters of Mineral Products Association

Iran exported 17.5 million tons of minerals worth $2.4 billion over the four months, indicating a 31% rise compared to same period last year, Iranian Mines and Mining Industries Development and Renovation Organization recently reported.

Crude steel and steel products accounted for nearly half of the overall export value, with aggregated shipments weighing 2.5 million tons worth $1.1 billion, recording 36% and 88.7% growth respectively. Furthermore, 5.7 million tons of iron ore worth $227.2 million were exported, recording 69% and 86% growth respectively.

Copper and copper products came next with 281,300 tons worth $373.3 million – a four-fold increase in volume and 52% rise in value.

Iron ore was third with exports of more than 5.7 million tons worth $227.2 million, up 69% in volume and 86% in value terms.

According to Vakil, steel, iron ore and copper have all experienced an increase in global prices in the past few months, while little has changed domestically.

Many steelmakers around the world surprised analysts with better profits and the stocks enjoyed the best rally in years. At the beginning of 2016, steel prices rallied with the speculative fever in iron ore and signs that extra stimulus would spark a recovery in the Chinese economy. Both iron ore and steel global prices peaked in late April, Bloomberg reported.

Iron ore came out of 2015 at its lowest in years as it dropped to about $30 per ton in December. The steelmaking material took on a positive trend in early 2016, and over signs of China’s cutbacks in its steelmaking capacity, spiked to a high of $70.46 per ton in April. The commodity’s gains lost steam in early May but have been recovering since June. According to Metal Bulletin, 62% Fe iron ore CFR China stood at $60.22 per ton on Monday.

After a rebound in early 2016, hot-rolled band ready for delivery at the port of choice hit about $450 per ton in late April, according to SteelBenchmarker, a World Steel Dynamics company.

Copper prices have also been on the rise lately. After hitting a low of about $4,600 per ton, prices rebounded to more than $5,000 in late July, according to London Metal Exchange statistics.

On the domestic front, Iranian iron ore and steel producers are grappling with faltering demand in the construction sector, and the industry’s capacity expansion projects are yet to come on stream. Currently about 7 iron ore concentrate and pellet plants are under construction in Sangan region located in the eastern Khorasan Razavi Province. The projects are expected to come on stream by the end of the current fiscal year in March  2017.