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Trade funding tightens for Iran polymers

November 23/2011

(ICIS) -- Trade financing has tightened for polyethylene (PE) and polypropylene (PP) going in and out of Iran, after fresh waves of US-led international sanctions hit the Middle Eastern country, industry players said on Wednesday.

Middle Eastern and Asian players are facing difficulties settling trades with their Iranian counterparts amid growing pressures to isolate Iran over its suspected pursuit of a nuclear weapons programme. UK and Canada have also announced plans to impose further sanctions on Iran.

The US named Iran as an area of "primary money laundering concern this week, prompting financial institutions to take extra care in their dealings with the country.

South Korean banks, which used to act as a middle man for transactions involving the import and export of Iranian cargoes, are now being restricted from handling tri-party transactions, market sources said. Settlements should now only be directly between South Korea and Iran, thereby firmly shutting the South Korea route in trading of polymer cargoes for northeast Asian and Middle Eastern players, trader said. Some of these players have switched to selling through traders based in Dubai, UAE, but there are signs that this route, too, will close, they said.

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.

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