Sanctions lift on Iran imports unlikely to impact Europe melamine

28 November 2013 17:27  [Source: ICIS news]

LONDON (ICIS)--A lifting of sanctions on Iranian imports would not pose any threat to the European melamine market as volumes are unlikely to be significant, melamine sources said on Thursday.

The majority of market participants this week said if sanctions are lifted on Iranian imports, prices might come under downward pressure in the second quarter of 2014, but the impact is not likely to prove much of a game-changer.

“Although the Iranian material may arrive in Europe at competitive prices, the quantity - because of its [Iran’s] capacity - will not be significant,” a trader said, adding that it did not think Iranian imports would have a major impact on European prices.

“I think it’ll only have a minor impact because they [Iran] send [material] to Turkey,” a producer said. “Maybe there would be a few 100 tonnes a quarter more in the market, but I'm quite relaxed in that sense.”

Players did not think there would be any Iranian melamine imports in Europe until the second quarter of 2014 at the earliest, and some said this was so far in the future that it was not easy to see where the market would be.

“So many things can change, especially on the supply side,” the producer added.

A buyer, however, said prices could decrease: “They [Iranian producers] used to sell in Europe. If the European Union decides to lift the anti-dumping – and I don’t see any shortage in Europe – we could see interesting prices.”

“The Iranian plants are not that big so it will not be a big issue in the market,” another trader said. “People are already checking opportunities to source from there, and they have customers in Turkey.”

Melamine spot prices are at €1,190-1,220/tonne ($1,608-1,649/tonne) FD (free delivered) northwest Europe (NWE).

According to ICIS data, there are two melamine producers in Iran. Khorasan Petrochemical Co (KHPC) is based in Bojnurd and has a nameplate capacity of 20,000 tonnes/year.

Tabriz Petrochemical Co (TPC) is located in Orumiyeh, with an output of 3,000 tonnes/year.

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($1 = €0.74)

By: Helena Strathearn
+44 208 652 3214

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