Iran Remains Optimistic On Exports

                                    Dubai crucial for Iran



By Malini Hariharan

The blog recently had an opportunity to talk to a few Iranian companies and was impressed by their sanguine approach to the challenges posed by the new round of sanctions.

This too shall pass was the prevailing philosophy.

“We have a long experience [in dealing with sanctions]; we feel the pinch immediately after the announcement but slowly adjust and find new ways to do business,” said an Iranian source.

Dubai continues to be the main conduit for exports but in some cases secondary companies have been set up at other locations to mask the trail to Iran.

A second source believed the sanctions were merely a test and was confident that nothing can stop them from exporting product.

They often do not get the best price in the market but no one was complaining about this.

The figures do suggest that Iran has been successfully placing product.

The Tehran Times reported that exports were up 50% (in value) during the first seven months of the Iranian calendar year ended 22 October, with polyethylene (PE) and methanol being the major exports.

The managing director of Iran’s Petrochemical Commercial Co (PCC) said the country had defined new target markets such as Africa and South America. He also noted that “the final stages of negotiations between Iran and Egypt were ongoing “for exporting  poylpropylene (PP), urea, fertilizer, methanol and paraxylene”.

But China will remain a key market. Iran exported around 350,000 tonnes of High Density polyethylene (HDPE) to China during January-September, up 33% from last year, reports my colleague Bee Lin on ICIS news.

Linear-low Density PE (LLDPE) exports were up 15% at 50,000 tonnes while Low Density PE (LDPE) exports tripled to 187,819 tonnes.

The volumes are set to rise even further as PCC Shanghai, a wholly-owned subsidiary of PCC, has obtained a licence to sell PE and PP in yuan in the Chinese domestic market.

It has also applied for a license to sell liquid petrochemicals in yuan.

The only worry that was evident in some quarters was the move by newly privatised companies to enter their market on their own. Previously PCC was the sole exporter of Iranian product.

“They don’t have much experience and sometimes undercut other sellers by as much as $100-150; they don’t realise that they are running the risk of starting anti-dumping investigations,” complained a third source.

The private companies are no doubt been eager to test their wings. But with the going getting more difficult and ingenious ways needed to do business they could eventually return to PCC.

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