Iran's ethylene exports to Asia taper off ahead of winter

11 December 2008 12:24  [Source: ICIS news]

Harsh winter would affect feedstock suppliesSINGAPORE (ICIS news)--Iran has scaled down its ethylene exports in December due to lower operating rates ahead of winter and increased downstream production, sources close to state-run cracker operator National Petrochemical Co (NPC) said on Thursday

Iran, which was seen to export as much as 70,000-80,000 tonnes/month during peak periods this year, has drastically scaled back exports in December to just a few contractual cargoes as a result of lower seasonal production, sources said.

Maintenance work at its gas feedstock pipelines, increased operating rates at downstream polymer and monoethylene glycol (MEG) plants in Assaluyeh, and recent minor cracker outages had caused a significant reduction in spot ethylene exports.

In the Assaluyeh petrochemical complex, both the ethane-based 1m tonne/year No 9 Arya Sasol and the 1.32m tonne/year No 10 Jam Petrochemical crackers have recently been restarted after a production hiccup, which lasted for 10 days.

Other crackers located in Bandar Imam, such as the 1.1m tonne/year No 7 Marun Petrochemical, was also said to be short of export capability due to a stronger focus on supplying domestic consumers due to a cracker shutdown.

The outlook for ethylene exports in the coming months could also remain bearish if the country experiences a harsh winter, as gas feedstock supplies would be diverted from petrochemicals towards heating purposes.

“We hope we do not have a cold winter this year,” said a source close to the company.

Asian buyers, especially those in Indonesia, have had difficulty sourcing spot ethylene cargoes at lower prices, as Iran has been the main source of spot supply.

As a result, spot offers into Indonesia and China have jumped by more than $50/tonne CFR (cost and freight) to over $500/tonne CFR despite relatively weak demand.

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By: Steve Tan
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