(Minews) - Head of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), Mehdi Karbasian says as of April 21 copper cathodes will only be sold at the Iran Mercantile Exchange (IME), in a move aimed at eliminating middlemen, IME website reported.
Following the sudden decline in global copper prices, middlemen have been selling the commodity at least 10,000 rials below the IME prices.
According to Karbasian, such practices have considerably reduced demand in the IME, pushing IMIDRO and the National Iranian Copper Industries Company (NICICO) to scramble for a solution. He expressed hope that with the IME cooperation, the decision could be extended to other copper products as well.
“The mercantile exchange is the best place to trade commodities as it increases price transparency and enhances economic security. The IME can significantly reduce the role of middlemen in unofficial markets,” emphasized Karbasian, who is also the deputy minister of industry, mine and trade.
He cited the example of the steel sector wherein the middlemen dominated the market until a few years ago before the IME started playing a bigger role in offering steel products, which led to the market becoming more regulated. “Although the middlemen have not yet been completely eliminated from the steel market, their role has been significantly reduced,” said Karbasian.
“The administration is counting on the IME for its Plan of Action to Exit Recession,” said the deputy minister, who described the IME as a market which benefits both sellers and buyers.
Copper prices fell to $5,400 per ton in late January from $6,945 in September last year. Being the 14th biggest producer of smelted copper and the 23rd producer of refined copper, Iran has incurred huge losses due to the price fall.
