07 November 2012 04:55 [Source: ICIS news]
By Ong Sheau Ling
SINGAPORE (ICIS)--Overseas shipments of polyethylene (PE) from Iran will likely resume progressively late this week, as domestic producers are in the process of securing export licenses, market players said on Wednesday.
PE exports were temporarily halted from 30 October following reports that the Iranian government has proposed to ban shipments of 50 commodities, including petrochemicals.
Iran’s Arya Sasol Petrochemical Co (ASPC), which produces low density PE (LDPE) and high density PE (HDPE), had secured the license on 6 November, and is likely to announce resumption of exports this week, a source close to the company said.
ASPC has two polymer plants with a combined capacity of 600,000 tonnes/year in Asaluyeh.
“It makes perfect sense that the [export] ban does not apply [to ASPC],” said one of the company’s buyers in India, citing the location of the plant at Iran’s economic zone.
Mehr Petrochemical Co (MHPC), which produces HDE, has applied for license and is hopeful of getting it within two weeks, a China-based buyer of the company’s products said.
“[MHPC] is in the hurry to export, because the containers are just accumulating at the port and customers are waiting,” the source said.
With the main criterion for getting the export license from the Iranian government being the location of the producers’ facilities, market players expect all seven key PE makers would be able to resume shipments. (Please see table below)
Iran’s five other key PE exporters include Arak Petrochemical, Jam Petrochemical, Laleh Petrochemical, Marun Petrochemical and Amir Kabir Petrochemical Co (AKPC).
“Very soon, all the key PE exporters will resume exports. Supply condition will be back to normal,” a Mumbai-based trader said.
The export license, however, will not be granted to Iranian traders that export material.
“Some Iranian traders tried to apply for the export license, but they were rejected,” an Asian player said.
These Iranian traders were heard buying local cargoes in Iranian rials and exporting these materials to Turkish and Middle East-based traders in euro and US dollars, displeasing the Iranian government, market sources said.
“These traders took advantage of the large disparity in the exchange rate quoted in the black market and the central bank of Iran to lock in profit,” a UAE-based trader said.
The Iranian government wanted to assure domestic converters of raw material supply in proposing the export ban, as imports are being restricted by the international financial sanctions imposed on the country over its suspected nuclear weapons program, industry sources said.
But it seems that Iran had a change of heart. Tehran Times reported that Iranian oil minister Rostam Qasemi had lifted the ban of petrochemicals, with a new order issued detailing regulations on exports of these commodities.
“It seems like exports will resume soon. Prices in export markets may stop their upswings,” a Mumbai-based trader said.
Chinese traders had said that Iran’s domestic market could not absorb all its PE output, necessitating exports.
In India, buying sentiment has improved as Iranian producers shunned all discussions for new cargoes, market players said.
PE plants located in the special economic and free trade zones in Iran
Company Name Location Grades Nameplate capacity (kt/a) Bandar Imam Petrochemical Co (BIPC) Bandar Imam HDPE 120 LDPE 100 Marun Petrochemical Bandar Imam HDPE 300 Amir Kabir Petrochemical Co (AKPC) Bandar Imam HDPE 140 LLDPE 300 LDPE 300 Laleh Petrochemical Bandar Imam LDPE 300 Mehr Petrochemical (MHPC) Asaluyeh HDPE 300 Arya Sasol (ASPC) Asaluyeh MD/HDPE 300 LDPE 300 Jam Petrochemical (JPC) Asaluyeh HDPE 300 HD/LLDPE 300
Nameplate capacity (kt/a)
Bandar Imam Petrochemical Co (BIPC)
Amir Kabir Petrochemical Co (AKPC)
Mehr Petrochemical (MHPC)
Arya Sasol (ASPC)
Jam Petrochemical (JPC)
($1 = €0.78)
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