Economy

CBI: Iran Financial System on Sound Footing (Financial Tribune – 6 June 2017)

Even though a handful of Iranian banks are fighting formidable challenges, including unhealthy balance sheets and thin capital cushions, they are not facing any existential threats, said a Central Bank of Iran official in response to recent claims that the financial system is nearing bankruptcy.

“At present, a number of banks are facing problems like capital shortage, accumulation of souring assets and non-performing loans higher than international standards and this has caused them to generate little profit in the past two years,” admitted Abbas Kamarei, CBI’s director general for supervision over banks and credit institutions, Banker.ir reported.

“CBI is exerting oversight on their performance as the supervising entity and their bankruptcy is something that will not take place easily,” he added.

Noting that bankruptcy of banks differs from that of companies, the official pointed to measures considered in international banking instructions to prevent bankruptcy, namely structural reforms and merging.

 

Tehran Mehr Housing to Conclude by March (Financial Tribune – 6 June 2017)

The construction of remaining units of Mehr Housing Project in the Iranian capital will be completed by the end of the current fiscal year (March 20, 2018), announced the director of housing and construction at Tehran Roads and Urban Development Office.

“With the completion of Mehr housing units and their transfer to applicants, we extended infrastructure services to Mehr housing in cities of over 25,000 people in Tehran Province since four years ago,” Parviz Firouz was also quoted as saying by Fars News Agency.

The official elaborated that providing safety and meeting the educational, recreational and religious needs of people living in the aforementioned sites constitute these infrastructure services.

“In line with these services, we granted lands with suitable uses and allocated subsidies,” he said.

 

Free trade agreement discussed between Iran, Eurasian Economic Commission (Tehran times – 5 June 2017)

Mahmoud Vaezi, Iran’s minister of communications and information technology who is also the chairman of Iran-Russia Joint Economic Committee, and Veronika Nikishina, member of the board and also minister for trade of the Eurasian Economic Commission, discussed different aspects of a free trade agreement which is due to be signed between the two sides.

The discussions were made in St. Petersburg on Thursday on the sidelines of the 21st St. Petersburg International Economic Forum (SPIEF 2017), held from June 1 to 3, IRNA reported.

The Moscow-led Eurasian Economic Union aims to finalize a free trade deal with Iran by the end of the year, in an attempt by Russia and its fellow members to deepen ties with Tehran.

Reaching a deal on free trade would represent a notable victory for the nascent EEU — a single market of Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia set up in 2015 — and mark a significant strengthening of relations between Iran and the former Soviet republics.

 

Transit of goods jumps 8.6% in 2 months (Tehran Times – 6 June 2017)

Iran exported 1.44 million tons of goods during the first two months of the present Iranian calendar year (March 22- May 21, 2017) via its land and maritime borders, showing 8.6 percent increase compared to the same period in the previous year.

As IRNA reported, 357,923 tons of the transited goods in the said time were oil products and 1,081,877 tons were non-oil products.

 

Industry

Call for Bolstering Canning Industry (Financial Tribune – 6 June 2017)

About 30% of agricultural products in Iran go to waste every year, costing the country’s economy over $5 billion per annum.

In fact, the canning industry is among the most important processing industries minimizing agricultural waste, Financial Tribune’s sister newspaper Donya-e-Eqtesad reported in a pamphlet recently published on Iran’s food industry.

Mohammad Mir-Razavi, secretary of the Syndicate of Canning Industry, believes the government’s financial support can help reduce wastage to a large extent.

“If cheap loans are granted to players in this industry, we can reduce the waste volume greatly by processing agricultural products,” Mir-Razavi said.

He noted that if farmers are able to harvest their crops on time, both the farmers as well as canning factories can benefit.

 

Iran Flat Steel Importers Seek Lower Prices (Financial tribune – 6 June 2017)

ranian flat steel importers and traders were seeking lower prices to offset weakening sentiment in Iran’s domestic market.

“Prices in the local market are decreasing day by day,” one trader said, adding that buying activity had been limited due to the presidential elections in Iran earlier this month.

The holy month of Ramadan, which started on May 26, has also led to a slowdown in market activity, sources said.

Hot-Rolled Coil

Hot-rolled coil offers to Iran from Russia’s Magnitogorsk Iron & Steel Works, otherwise known as MMK, were heard at €400 ($446) per ton FOB Astrakhan.

With the cost of freight to the northern Iran port of Anzali currently standing at around $15-16 per ton, that would be equivalent to $461-462 per ton CFR. However, the high rate of the euro rate against the US dollar made HRC prices from Russia unattractive for Iranian customers, compared to the ones from Kazakhstan.

HRC of 2 mm thickness from Kazakhstan’s ArcelorMittal Temirtau was on offer at $420 per ton FOB Aktau. One cargo was reportedly booked by a trader at that level, with the cost of freight from Aktau to Anzali at about $9 per ton, sources said.

Metal Bulletin’s weekly assessment for the import of 2 mm HRC in Iran dropped to $429-461 per ton CFR Iranian ports on May 31, down from $430-466 per ton CFR last week, due to fluctuations in the dollar-euro exchange rate.

Cold-Rolled Coil

ArcelorMittal Temirtau offered cold-rolled coils to Iran at $500 per ton FOB Aktau.

This would be equivalent to $509 per ton CFR Iran, with ArcelorMittal providing a $10 per ton discount for larger shipments.

Nevertheless, no new bookings were heard done last week.MMK’s CRC was available for Iranian customers at €440 ($491) per ton FOB Astrakhan. This would be equivalent to $506-507 per ton CFR Iran.

“MMK is not hungry for sales now [as it has] good markets outside Iran,” one trader said, adding that the supplier was planning to increase CRC prices in the near term.

Metal Bulletin’s weekly assessment for CRC imports in Iran slid to $499-506 per ton CFR Iranian ports on May 31, down from $510-515 per ton CFR a week earlier.