Economy, Business And Markets

Ministry Okays Cement Export via IME

Ministry Okays Cement Export via IMEMinistry Okays Cement Export via IME

The deputy minister for industry, mine, and trade said the ministry has agreed to the Iranian association of cement manufacturers and exporters’ request for including cement in the list of commodities offered at the Iran Mercantile Exchange (IME), reported FNA.

Mojtaba Khosrotaj said “if the association has concluded that the move is in favor of the national cement industry, we will agree with that.”

The move is aimed at implementing the administration’s new policies to bring the country out of recession without causing a rise in inflation.

In doing so, the government of President Hassan Rouhani has tasked the mercantile exchange with liberating the prices for different commodities.

Following a downturn in the cement market, industry executives have recently started to hold regular meetings to reoffer it on the IME’s export trading floor. Cement prices were liberalized in Iran in 2008.

The cement industry, however, was hit hard in 2010 when the first phase of the controversial subsidy reform plan came into effect, as the plan partially removed energy subsidies.

The move caused energy costs to soar in cement factories, which are among most inefficient industrial plants in Iran in terms of energy consumption.

Cement was listed on the mercantile exchange 13 years ago but its offers were suspended after a short while, said Abdorreza Sheikhan, the Secretary of Iran’s Cement Industry Employers.

He added that the product is to reenter the IME soon. In addition to the Mercantile Exchange, 28 cement producers have been also listed on the Tehran Stock Exchange (TSE) from 2010.

In 2010, the cement manufacturers sold over 1 million metric tons of their products at the IME, “but restrictions imposed on pricing by the government of former president Mahmoud Ahmadinejad discouraged cement producers and after a year, they stopped offering cement at the mercantile exchange,” he stated.

Sheikhan added that if the decision to relist cement on IME is finalized, the cement companies would not be able to export their products on their own and will be required to offer it at the IME first. He emphasized that the process would organize cement exports and end the industry’s recent downturn.