According to a new rule from the Iranian ministry of industry, steel manufacturers will have to to restrict sales of their products only through the Iran Mercantile Exchange (IME). IME is a commodities exchange where farm, industrial and petrochemical products are traded via the spot and future markets.
The newly issued law applies to all the companies that produce steel ingots or use these as a raw material to produce varied steel products, viz, steel billets, blooms, slabs, steel sheets, etc.
The move aims to bring balance in the prices of steel by increasing supply on the commodity exchange market and producers who fail to comply with the new rules will be banned from buying steel ingots from the IME.
“Yes, this new rule has been announced but I do not think this rule will become applicable,” an Iranian market source told SteelMint.
Interestingly, market observers welcomed this decision stating that the rule will help in improving transparency and increase competitiveness in the key sector.
Iran produced 12.99 mn t and 9.28 mn t of semi-finished and finished steel, respectively, in the first half of the current Persian year (Mar-Sept’21), a y-o-y fall of 14% and 105%, respectively. The decline in production comes as steel mills were forced to lower electricity consumption amidst widespread blackouts in the scorching summer.
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