Tariffs on Iron Ore Export From March

Export tariffs will be imposed on unprocessed iron ore shipments as of the next Iranian fiscal year (to start March 20, 2017), announced deputy minister of industries, mining and trade, Jafar Sarqeini, on Sunday.

“The exact amount of the introduced tariff rates has not yet been specified,” the official told Bourse Press.

According to Sarqeini, the move is aimed at boosting domestic steel production and creating more added-value for the economy.

Government officials and miners have been locked in a heated debate over the issue of unprocessed mineral exports, especially iron ore for years. Lawmakers contend that Iran’s rising steelmaking capacity, which is expected to reach 55 million tons by the end of 2025, requires a steadily increasing feedstock of iron ore and that exporting the industrial material is against the industry’s interests.

This is while Iranian iron ore miners, many of whom belong to the private sector and suffered during the 2015 commodity market recession, argue that now is the right time for iron ore exports.

The spot iron ore price is up 60% this year, as Chinese iron ore futures climbed to their strongest level in more than two years on Friday, reflecting firm demand for the steelmaking material as steel prices stretched gains along with coal to multi-year highs.

Trading in the physical iron ore market was largely brisk this week, pushing the 62% spot benchmark to $64.50 per ton on Thursday, up 0.2% from Wednesday and the strongest since April 29, according to the Australian Financial Review.

Also, 60% of Iranian iron ore CFR China stood at $58.32 on Thursday, up 9.42% compared to the day before.

The Iranian Iron Ore Producers and Exporters Association intends to boost iron ore exports to 15 million tons by the end of the current Iranian year (March 20, 2017) before the new regulations take effect, according to the head of IROPEX, Qadir Qiafeh.

In 2015, Iran exported 14.8 million tons of iron ore, down 35% compared to 21.8 million tons in 2014 and was ranked the world’s 11th leading exporter of the steelmaking material.

Most of Iran’s iron ore exports were to China. In 2015, exports to China decreased by 40% from 2014 to 13.2 million tons owing primarily to prevailing low global iron ore prices.