Iran: IME to resume cement trading

Iran: IME to resume cement trading
Published: 05 January 2017


The Iran Mercantile Exchange’s (IME) export trading board, established to curb unhealthy competition among cement producers and other trades, is all set to resume cement trading, the head of the country's Cement Employers Association, Abdolreza Sheikhan, said.

Founded in 2006, IME trades in agricultural, industrial and petrochemical products in the spot and futures markets. Iran's cement industry has been dealing with low demand and the consequent liquidity issues for the past few years, due to stagnation in the construction sector. The shrinking market caused cement producers to set lower prices at the expense of quality and to increase exports.

Abdolreza Sheikhan added that the precise date of the IME's resumption will be announced by Iran Trade Promotion Organization. "By entering IME, we expect to witness competitive and stabilised prices, achieve trade transparency and reestablish foreign traders’ trust in the quality of Iranian cement," he said.

In early 2015 the Iraqi government banned the import of Iranian cement citing low quality, which deprived Iranian producers of their most lucrative market. More than 15Mt of cement and clinker were exported in the last Iranian year that ended in March 2016, with Iraq accounting for close to 65 per cent of the figure. Iranian cement producers have recently found new markets in Tanzania, Egypt and Haiti.

Iran's 80Mta cement manufacturing capacity exceeds domestic demand by more than 30Mta, according to data released by the Planning and Budget Organization.

Despite this, the Ministry of Industries, Mining and Trade has set the target of 60 per cent growth for domestic cement output over the next decade to reach 120Mta. Exports are also envisioned to rise 68 per cent to reach 32Mta.

Domestic production has also been on a downward trend as the 2015 output reached 58.6Mt, a fall of 12 per cent from the previous year, according to the association’s data.