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PE supplies from Iran may be disrupted after the US imposed new sanctions

November 22/2011

(ICIS) -- Major Chinese importers are seeking alternative sources of polyethylene (PE) resins as supply from Iran may be disrupted after the US imposed new sanctions on the Middle Eastern country over its nuclear programme, industry sources said on Tuesday.

We have to find alternatives to our [Iranian] suppliers. It is forbidden for China to export [product] to Iran because of the sanctions. Sooner or later, Iran will be forbidden to export [product] into China, said an eastern China-based importer. A sizeable chunk of China"s PE imports is at risk because of growing international pressure to isolate Iran.

In the first nine months of 2011, Iran exported 228,780 tonnes of low density polyethylene (LDPE) film and 305,000 tonnes of all high density polyethylene (HDPE) grades to China. Irans LDPE supply accounted for 21.4% of Chinas total imports of the material, while the HDPE supply has a 12.0% share to total imports of the polymer for the period, China Customs data showed.

The impact on supply will be most felt on the HDPE injection and blow moulding grades given that there are few such suppliers in the market, said a second Chinese importer. LDPE film supply is currently still outstripping the demand, so even if Iranian goods are out of the picture, the supply availability will still meet the demand, the importer added.

A third Chinese importer said it has reduced its monthly LDPE film import volumes from Iran by more than half this year from 15,000 tonnes/month in 2010, and is likely to cut import volumes further in 2012.

Perspectives of development of the polymers markets, pricing issues and other important aspects will be discussed at The Polymers Summit-2011, which will be held in Moscow on November 30, 2011 at the Ritz Carlton Hotel. The Summit is organized by MRC with the support of ICIS. The main idea of the Summit is to find a "the golden mean" between producers and converters. When producers receive exactly such margin of production, which helps them to invest in production expansion in order to substitute polymers imports, and the converters receive such price of feedstock that helps them to compete imported finished products. The Summit site gives an access to the live video of the Summit, speakers" presentations, as well as opportunities to ask questions or make appointments to any Summit partcipant.

Tags:PE, HDPE.
Category:General News
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