What Is the Iran Mercantile Exchange: From Physical Auctions to Deposit Certificates and Standard Parallel Forward Sales

"The commodity exchange" is really a shared name for three different markets: one where steel and cement get priced through auctions, one where a silver bar or a bag of saffron sitting in a warehouse turns into a tradable certificate, and one where a producer sells its future output today to raise cash. This lesson opens up all three.

What you will learn in this lesson

How physical trading on the Iran Mercantile Exchange (IME) prices steel and cement, what a commodity deposit certificate for coin, silver, and saffron actually represents, and how a standard parallel forward sale differs from a plain forward sale and from the futures contract covered in the previous lesson. Mechanism only, no trading advice.

Definitions

• Iran Mercantile Exchange (IME), «بورس کالای ایران»: a regulated market, supervised by Iran's Securities and Exchange Organization, where real commodities, from iron ore to saffron, and commodity based financial instruments are traded.
• Physical market and hall, «بازار فیزیکی» and «تالار»: the part of IME where the commodity itself, not a future contract, is bought and sold the same day; a hall is a sub market grouping related commodities, such as the industrial and mining hall or the cement hall.
• Offering and auction, «عرضه» and «حراج»: an offering is the notice a producer publishes before trading, stating the quantity, base price, and delivery terms; an auction is the price discovery method where registered buyers bid against that base price and the highest bid wins.
• Commodity deposit certificate, «گواهی سپردهٔ کالایی»: a security representing ownership of a fixed quantity of a standardized commodity held in an IME approved warehouse, or vault («خزانه»), traded on the exchange like a stock.
• Redemption, «ترخیص»: the process by which a certificate holder, instead of selling the paper, collects the physical commodity from the warehouse.
• Forward sale, «سلف»: a producer's commitment to deliver a commodity in the future in exchange for cash received today; a financing tool, not just a price bet.
• Standard parallel forward sale, «سلف موازی استاندارد»: the same forward commitment, but with standardized terms so the paper can also be bought and sold on the exchange before maturity.

The physical market and price discovery for steel and cement

On the physical market, a producer first registers an offering: which commodity, how much, at what base price, and in which hall. Iron ore, billet, and rebar are usually offered on the industrial and mining hall or the open auction hall; cement has its own hall, and part of its volume also moves through the simultaneous auction hall; petrochemical products and agricultural goods each have separate halls too.

On trading day, registered buyers compete against the base price; in an open auction, the price climbs until one buyer places the final, highest bid. That winning price becomes public the same moment and turns into the day's reference price for that commodity. This mechanism differs from the coin and bullion auction run by Iran's Exchange Center for currency and gold: the two are separate institutions pricing two different families of assets.

Commodity deposit certificates: from coin to saffron

The idea behind a deposit certificate is simple: instead of you having to find a secure warehouse and verify quality yourself to buy a silver bar or a batch of saffron, the exchange does that for you. A producer or holder deposits the commodity in an IME approved warehouse, the exchange verifies the quantity and quality, and a certificate is issued representing that specific commodity. From that point on, the certificate itself is priced on the IME board like a stock.

A certificate buyer has two paths: hold or sell it on the secondary market without ever touching the physical commodity, or approach the exchange for redemption and collect the actual commodity from the warehouse. For a producer, a deposit certificate is also a financing tool: instead of keeping capital tied up as idle inventory in a warehouse, it turns that inventory into a cash convertible security. IME has launched this instrument for gold coin, silver bullion, and saffron.

Forward sale and standard parallel forward sale

A plain forward sale is the oldest form of agricultural and industrial financing: a farmer or factory sells output it has not produced yet, starting today, and receives the cash right away; in exchange, it commits to deliver the commodity on a set date. The problem with a plain forward sale is that the buyer is stuck holding an untradable contract until maturity.

A standard parallel forward sale takes that same contract, standardizes its terms (quantity, quality, maturity date), and lists it on the exchange board; the first buyer can then sell the paper to another buyer before maturity, on the parallel market. That is exactly what "parallel" in the name refers to: a parallel secondary market for buying and selling a commitment that has not matured yet. Note that this differs from the futures contract covered in the previous lesson: futures are settled and margined every night, while a standard parallel forward sale is a one time purchase; it carries no daily settlement and no margin call.

A worked example

This example is entirely hypothetical and exists only to show the math. Suppose a cement producer, to raise working capital, issues ten thousand standard parallel forward sale certificates, each equal to one ton of cement for delivery in four months. Today's spot price of cement is 1,000,000 tomans a ton, but to attract buyers the producer offers each certificate at 900,000 tomans; ten thousand certificates raise nine billion tomans in immediate cash for the company.

A hypothetical buyer needs cash two months later, before maturity. If the market's expected delivery price has by then risen to 1,050,000 tomans, the buyer can sell the certificate on the parallel market, say around 970,000 tomans, to another buyer and lock in a gain of 70,000 tomans per certificate, without ever taking delivery of a bag of cement. If the expected price falls instead, that same early exit can come with a loss.

In Iran's market

A few official figures show the real size of these three markets. Based on IME's weekly report for the week ending July 31, 2026 (9 Mordad 1405), the physical market traded 3,670,000 tons of goods worth 97.8 trillion tomans, a 24.4 percent volume increase from the week before. In that same week, 1,078,000 tons of cement were sold in the cement hall alone, with 4,546 buyers from 30 provinces taking part (source: KalaKhabar, IME's official news portal).

On the deposit certificate market, on Sunday, August 2, 2026 (11 Mordad 1405), 790 kilograms of silver bullion worth 311.8 billion tomans changed hands (source: KalaKhabar). On the saffron deposit certificate and fund market, in the same week ending July 31, 2026, total turnover reached 448 billion tomans (source: Bourse News, citing IME's weekly report). These figures shift week to week; what stays fixed is the real separation of three markets inside this one exchange.

Common mistakes

• "A deposit certificate is a future commitment, like a futures contract." No; a deposit certificate shows immediate ownership of a commodity that already sits in a warehouse, just like buying a stock. A future delivery commitment belongs to forward sales and futures.
• "IME's auction and the coin and bullion auction at the Exchange Center are the same market." They are entirely separate institutions; IME trades steel, cement, saffron, and deposit certificates, while the coin and bullion auction is a different body run to manage the coin premium.
• "Buying a deposit certificate means I have to take delivery." Physical redemption is an option, not an obligation; most certificate holders simply buy and sell it on the board.
• "A standard parallel forward sale carries no risk because it is exchange listed and official." The certificate's secondary market price can drift from the buyer's original expectation, and if the producer fails to deliver at maturity, delivery risk still sits on the table.

Summary

Under one name, the Iran Mercantile Exchange does three different jobs: on the physical market, offerings and auctions discover the day's price for steel and cement; commodity deposit certificates turn coin, silver, and saffron sitting in a warehouse into a cash convertible security; and a standard parallel forward sale lets a producer cash out tomorrow's output today, without trapping the first buyer in that contract until maturity.

In the previous lesson we saw how futures and options contracts work. For a comparison with the other institution that runs an auction, see the coin and bullion auction at the Exchange Center, and for the full lesson list visit Sahmino Academy.