Iran is unlikely to stop exporting polyethylene (PE) resins because the domestic market could not absorb all its output, Chinese traders said on Wednesday, amid reports that the Middle Eastern country will ban overseas shipments of some commodities, ICIS reported.
"Our suppliers in Iran said there's no cause for concern and that they will clarify with the local authority on the extent of the proposed export bans," a Shanghai-based trader said.
Iran is estimated to have a nameplate PE capacity of 3.8m tonnes/year and its domestic demand is barely a third of the total at around 1.1m tonnes/year, according to industry sources.
The proposed export bans, if implemented, would not apply to PE plants located in the special economic and free trade zones in Iran, said a second Shanghai-based trader, citing information provided by an Iranian supplier.
"We were told that the main Iranian exporters to China will not be affected by the export bans," the trader said.
These key Iranian PE exporters include Arak Petrochemical, Jam Petrochemical, Arya Sasol, Laleh Petrochemical , Marun Petrochemical and Amir Kabir.
Trading of Iranian PE resin was business as usual in the Chinese domestic market, despite news of the proposed export bans, Chinese traders said.
"Our shipments from Iran are scheduled up to December. We've not received any official notification of an export ban, and we've not slowed down our sales of Iranian product," a Guangzhou-based trader said.
Iran exported 854,600 tonnes of PE to China in January-September this year, 44% higher compared with the same period last year, according to data from China Customs.
The bulk of Iran's PE exports to China consists of low and high density PE (LDPE and HDPE), official data showed.
Edited by: S. Isayev