Iran restricts pellet exports to stem domestic shortage
The Iranian ministry of industry, mine and trade has not issued any permits for iron ore pellet exports since last week because of a shortage in the domestic market.
No pellet cargoes are available for export this week and cargoes committed earlier are loading but delayed and shippers are facing demurrage costs, market participants said. Some Iranian cargoes have already been contracted to be sold for October delivery, with buyers having made advance payment for them. But market expectations are for Tehran to continue restricting exports of concentrate in the coming months.
This follows a move in early June, when the ministry announced that in the interest of ensuring sufficient supplies for domestic mills, only mines and not traders are permitted to export iron ore pellet and concentrate.
Mines were also directed to prioritise supplies to the domestic market and would only be granted export permits after fulfilling their domestic demand.
The ministry has stopped issuing permits to small mines that have lapsed on their royalty payments in the last few years.
Iran has an estimated 49mn t of pellet output capacity this year and the government is concerned that the domestic market may face a shortage of concentrate, particularly when imports are not possible under US sanctions. In the Iranian year ending 20 March 2019, Iran exported an estimated 17mn t of iron ore, government data show.
China is the source of up to 97pc of Iranian iron ore exports and has continued to receive Iranian shipments despite increasing sanction pressure from the US.
source: Argus Media
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