Iran Marine Transportation faces a big challenge after sanctions!
Market News
– The notable reduction of bulk carries, in number, transporting Iran’s export shipments which now is more drastic than ever since August 6th (after the first round of US sanctions), due to rising risks of Iran Marine Transportation, faced the nation’s exports with huge challenges after all. Maritime shipping rates jumped again 20% contrary to the other week and now a 55 MT Supramax vessel will cost 29$ for a shipment from Bandar Abbas with the last week of September Laycan. Practically a 30$ rate would make shipments of Iron Ore, Concentrate and even pellets no longer profitable in scale.
– After the unreasonable price hikes in Iranian automobile businesses, the national Competition and Consumer Authority finally meddled and now shall decide whether the sector is eligible for a base price rise or not. Also, they have to vote on the proposed auto pre-sales restrictions in order to maintain the market and prevent speculative behaviours. These restrictions are:
- Each person can only buy one vehicle with a unique national ID number;
- Buyers must be over 18 years old in order to be eligible for pre-sale orders;
- Buyers shall hold to their purchases for at least 1 year after the delivery date;
Iranian auto industry is more like a national oligopoly with two major producers receiving all of the government supports and own 88% of the market. Also, the HHI formula which is used widely in global markets is not suitable for Iran’s market as the oligopoly goes for a long time.
– A while ago in an attempt to develop Iran Capital Market, easement of trading processes, raising the market liquidity level and reducing trade costs, Iran Securities and Exchanges Organisation tried to lower the commission of its different components. The below table demonstrates the full details:
In the Market
Equities did a comeback today in an eventful session that carried out good news for oil-related products. TEDPIX hiked for +1.18% and compensated for a good chunk of its yesterday’s loss as investors decided to trust the policymakers once again. IFEX jumped for 1.37% as well and closed at 1,527.16 level. Today’s market led mostly by anticipations of a free FX rate for all commodities as the VTB producers got a green light on that.
A directive freeing the VTB tender price cap caused a massive demand for Oil Products (+4.26%) tickers early morning. Almost all refinery components ended the day in good green and Bandar Abbas (+4.85%), Isfahan (PNES, +4.99%) and Tehran (PTEH, +4.96%) oil refineries were the frontrunners. This directive, however, has a negative effect on lube cut producers made them face with huge sale pressure towards the ending.
Analysts believe that this could only lead to a free FX rate for other commodities, most importantly iron and steel, which was the main catalysts behind their late jumps. Components of Metals (+2.47%) sector like Isfahan Mubaraka Steel (FOLD, +2.90%) ended the day with orders left in the buy queue while National Copper Industries (MSMI, +3.49%) also followed its trend with mostly the same value and volume.
Finally, today was also a better than expected session for Auto (+3.01%) industry as it seems officials are to vote “Ay” for an auto sale price hike. Stressing that these tickers are not in a good shape fundamentally, however, Saipa Co. (SIPA, +4.38%) and Iran Khodro (IKCO, +2.40%) were highly demanded; the first ended with massive purchase orders in the queue and the latter changed hands for 15 mn shares.
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