09 November 2012 11:34 [Source: ICB]
Iran's customs authorities have stopped clearing exports of polyethylene (PE) as the government considers an export ban on selected commodities that include polymers, industry sources said.
Domestic PE producers have initiated discussions with the government, hoping the suspension will be lifted soon, they said.
Sanctions related to Iran's nuclear activities have hit imports
"Iranian producers are in talks with the government, and producers are still loading cargoes out of the factories to the ports," a Chinese trader said.
The key Iranian PE exporters include Arak Petrochemical, Jam Petrochemical, Arya Sasol Petrochemical Co (ASPC), Laleh Petrochemical, Mehr Petrochemical Co (MHPC), Marun Petrochemical and Amir Kabir Petrochemical Co (AKPC).
Shipments of PE cargoes that had been cleared by Iran's customs authorities before 30 October, however, will proceed, Chinese traders and Iranian producers said.
"We have around 15,000 tonnes of PE resins that have cleared customs and [are] waiting to be loaded," a Chinese trader said.
"Our resins will still be loaded into containers and dispatched from the ports. So, our existing customers do not have to worry," said a source at an Iranian producer with facilities in Asaluyeh.
Iran, which has a nameplate PE capacity of 3.8m tonnes/year, exports the bulk of its output to countries such as China, India and Turkey.
The proposed export ban, if implemented, would not apply to PE plants in the special economic and free trade zones of Iran, said a Shanghai-based trader, citing information supplied by an Iranian supplier.
All PE plants in Iran are in the special economic zones, except those owned by Arak Petrochemical and Tabriz Petrochemical (see table).
"The list of banned products is not finalised yet. It will take at least a week for it to be officially announced," a source from Jam Petrochemical said.
Meanwhile, a source close to Arya Sasol said: "We are assuring our customers that their transacted cargoes will be exported and not cancelled because of the possible ban."
Buyers in China said that they have been getting assurances from Iranian producers that customs clearance at Iranian ports will resume shortly. Discussions in China for shipments of Iranian PE are still ongoing, they said.
"I think the export ban is just a gesture by the Iranian government to reassure domestic converters that their supply of polymers will not be affected by the sharp decline in imports," a Tehran-based trader said.
SANCTIONS HIT IMPORTS
Imports of polymers into Iran have taken a hit following the latest round of US-led sanctions implemented over the Middle Eastern country's suspected nuclear weapons programme.
In Turkey, the proposed export ban in Iran is also causing some concern. Iran is the second-biggest exporter of high density polyethylene (HDPE) into neighbouring Turkey.
"There are currently no trucks or containers out of Iran, even if you have paid for it," said one frustrated trader. "There is no cargo available at all."
"They [Iranians] have to sell. They are still producing and there are cargoes ready for loading," said the trader.
HDPE supply in Turkey is thinning because of Iran's proposed export ban, as well as lesser availability of material from Saudi Arabia.
In a move that was seen as strange under the present circumstances, Turkish PE producer Petkim lowered its HDPE prices by $25-35/tonne in the week ended 2 November.
Iranian producers and their buyers are hopeful that exports will resume in the near term. "I am hoping that this is only a temporary move and that the Iranian government will rescind the order soon. Otherwise, my business will be badly affected," said an Indian polymer trader.
Discussions in India for Iranian PE have ground to a halt because of the proposed export ban.
MHPC, ASPC and Laleh have stopped talks for new shipments into India from 1 November, while JPC has halted negotiations for new cargoes from 30 October, market sources said.
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