Economy, Business And Markets
0

Iran Gov’t Proposes New Base Metal Pricing System at IME

Business & Markets Desk
At the behest of Industries Minister Mohammad Shariatmadari, his deputy Hassan Younes Sinaki has recently proposed new formulas for calculating the base price of steel, copper and aluminum at Iran Mercantile Exchange
Article 99 of the Fifth Five-Year Development Plan (2011-16) states that commodities offered on IME are subject only to the exchange’s internal regulations.Article 99 of the Fifth Five-Year Development Plan (2011-16) states that commodities offered on IME are subject only to the exchange’s internal regulations.
The rationale for the new pricing mechanisms is that steel, copper and aluminum producers’ production costs are largely independent of foreign currency fluctuations, considering that they barely import any raw materials and also enjoy subsidized energy

The government is intervening in the pricing of base metals in the local market, again.
At the behest of Industries Minister Mohammad Shariatmadari, his deputy Hassan Younes Sinaki has recently proposed new formulas for calculating the base price of steel, copper and aluminum at Iran Mercantile Exchange.
The three new formulas are as follows:
Steel base price: Official exchange rate multiplied by 95% of Persian Gulf FOB
Copper cathode base price: Official exchange rate multiplied by premium (in USD) + London Metal Exchange price (in USD)
Aluminum ingot base price: Official exchange rate multiplied by premium (in USD) + LME price (in USD)
The steel formula, as the official’s primary concern, is set to replace the old formula of SANA forex rate multiplied by Metal Bulletin’s 15-day average CSI and Black Sea price.

Premium

Subscribe to the Financial Tribune to continue reading this article or Log in to your account if you are already a subscriber.

Find out more about our subsciption plans here.

Add new comment

Financialtribune.com