FocusIran PE shipments to resume soon; export licenses to be issued

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.

“Like what we said last week, we have told our customers that the issue in exporting will be resolved in a week to 10 days’ time,” the source 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.

Iran’s customs authorities have ceased clearing exports on 30 October even though the final list of commodities that will be banned for shipments has yet to be released, industry sources 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.

A number of Chinese traders had raised their PE offers late last week in the belief that a PE import ban in Iran will push up China’s PE import prices.

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

 ($1 = €0.78)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

Author: Ong Sheau Ling

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