Economy, Business And Markets

IME Mulls Scrap Iron Import

IME Mulls Scrap Iron ImportIME Mulls Scrap Iron Import

The Iran Mercantile Exchange said it was considering the import of scrap iron from the Commonwealth of Independent States (CIS) through the Interexchange Electronic Union (IEU), reported IME’s public relations and international affairs office on Tuesday.

The IME, which recently joined the IEU, said the shortage of scrap iron could be easily overcome through imports from the IEU members such as Kazakhstan, Armenia, Belarus, Ukraine, and Kyrgyzstan.

It added that would start to import scrap iron if the domestic steel producers make the demand for that, adding that it was negotiating to start offering the scrap iron provided by the Islamic Republic of Iran Shipping Lines (IRISL), the municipalities across the country, and the carmakers.

In September, the IME officially allowed the trade of scrap metals after registering 500 metric tons of iron scrap from Iran Railways Company, which was well received by the buyers.

It is starting the proceedings aimed at increasing trade transparency, rational pricing of initial and final products, and completing the steel industry chain. “We are promoting the trades of the raw material for steel production, namely scrap iron and iron ore,” said Ali Panahi, the deputy head of the IME.

Based on official statistics, scrap iron experienced an astonishing 700% growth in prices during the Iranian calendar years 1385 to 1392 (the latter ended March 20, 2014), while other raw materials in steel production chain never underwent such price growth.

Such a strong growth makes it necessary for the IME to act quickly in order to shield the steel producers from possible price fluctuations.

Iran annually produces 2 million metric tons of scrap metal, while another 2 million metric tons is required to fulfill domestic demand. The country imports hundreds of thousands of metric tons of scrap from neighboring CIS countries every year. Experts believe the scrap shortage is a serious threat to the domestic steel industry as the current annual production, hardly reaching 20 million tons, requires a far bigger supply of used material.

Steel manufacturers can also make significant savings by using scrap. They can save on energy, raw materials and recycling. Using scrap also helps with reducing air pollution, water consumption, and water pollution. Above all, for steelmakers, every ton of new steel made from scrap iron saves 1,115 kilograms of iron ore.