S Korea’s polymer exports to Iran to stabilise

19 March 2008 08:26  [Source: ICIS news]

By Prema Viswanathan and Brian Myung

SINGAPORE (ICIS news)--South Korea’s exports of polystyrene (PS), polyvinyl chloride (PVC) and polypropylene (PP) to Iran and Turkey are expected to stabilize in 2008 after surging last year, suppliers and traders from those countries said on Wednesday.

“In Iran, the start-up of new PP plants this year will blunt the appetite for imports,” a South Korean supplier said.

A second supplier said that a slew of maintenance shutdowns in South Korea in the first half of 2008 would limit polymer export availability.

Price resistance among Turkish buyers due to competition from Middle East and Indian suppliers would also cap South Korean exports to Turkey, the second supplier added.

A Tehran-based trader said that the cumbersome banking procedures following the imposition of US economic sanctions on Iran would further restrict imports.

“Besides Middle East suppliers, it is only the South Koreans who have been willing to brave the banking restrictions to sell into Iran. But even their patience seem to be running out,” the trader said.

 Most countries have stopped exporting to Iran or are demanding advance payments for cargoes following the imposition of US sanctions on three Iranian state banks late last year.

Only Iranian suppliers continue to extend favorable credit terms, due to their long-standing relationship with Iranian customers.

“Most of the Iranian banks insist that the transactions should be done in Euros and not in US dollars, which only the South Koreans are willing to comply with,” said an Iranian converter.

Iran ranks among the first 3-10 top export destinations for South Korean polymer producers in 2007.

South Korea’s copolymer PP exports to Turkey in 2007 were 25 times its exports in 2006 at 27,118 tonnes, while its exports to Iran surged 179% to 42,018 tonnes.

PS exports from South Korea to Iran surged by 500% to 13,609 tonnes, while exports to Turkey rose 66% to 4,390 tonnes.

PVC exports from South Korea to Iran and Turkey rose 57% and 50% respectively last year from 2006 levels to 21,050 tonnes and 33,741 tonnes.

By: Prema Viswanathan
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