Iran’s AKPC aims to bring poly­eth­yl­ene into South­east Asia

Iran Daily - - Domestic Economy -

Iran’s Amir Kabir Petro­chem­i­cal Com­pany (AKPC) aims to ex­port 5,000-8,000 tons per month of poly­eth­yl­ene to South­east Asia in 2018, with Viet­nam ex­pected to be the main tar­get mar­ket, Sales and Mar­ket­ing Man­ager Di­ako Ab­basi said on Fri­day on the side­lines of Viet­nam­plas 2017.

“This is our first year par­tic­i­pat­ing in Viet­nam­plas. We see great op­por­tu­ni­ties in Viet­nam, as the pack­ag­ing and film grade con­sump­tion is in­creas­ing [in line] with its young pop­u­la­tion,” Ab­basi was quoted as say­ing by Platts.

Grades that are ex­pected to see good de­mand in­clude gen­eral pur­pose and heavy-duty lin­ear low den­sity PE, high den­sity PE film, and HDPE pipe grade, he added.

“Our strat­egy is to bring large vol­umes of PE di­rectly from Iran to Viet­namese traders, dis­trib­u­tors and end-users, with­out go­ing through in­ter­me­di­aries,” he said.

AKPC had sold smaller quan­ti­ties of PE to Viet­nam about two years ago, Ab­basi said with­out elab­o­rat­ing.

Chi­nese traders have been heard re­selling Ira­nian PE to South­east Asia if net­backs were good, in­dus­try sources said.

AKPC op­er­ates a petro­chem­i­cal com­plex at Ban­dar Imam with a name­plate ca­pac­ity of 300,000 tons per year of LLDPE, 300,000 tons per year of LDPE, and 140,000 tons per year of HDPE, and is cur­rently op­er­at­ing at “full rates,” ac­cord­ing to the com­pany.

Bank­ing re­stric­tions, lo­gis­ti­cal un­cer­tain­ties, and dif­fer­ences in resin pref­er­ences in Viet­nam may pose chal­lenges for Ira­nian PE ex­ports, the man­ager at a ma­jor Viet­namese poly­mer trad­ing com­pany said Fri­day, cit­ing on­go­ing ne­go­ti­a­tions.

“Get­ting a Let­ter of Credit for an Ira­nian cargo is not pos­si­ble now due to bank­ing re­stric­tions, and with the cur­rent US ad­min­is­tra­tion, likely to be­come stricter in the fu­ture, not looser, bring­ing more risk to traders,” the trader said, leav­ing tele­graphic trans­fers as the only al­ter­na­tive.

Typ­i­cal bulk PE ship­ments from Iran may be over 10,000 tons, with up­front cash pay­ment re­quired in ex­cess of $10 mil­lion, which could lead to cash flow chal­lenges, the trader said.

In ad­di­tion, ship­ments from Ira­nian pro­duc­ers have been known to be de­layed to up to two months or ar­rive all at once abruptly, cre­at­ing fi­nan­cial and lo­gis­ti­cal chal­lenges for the buyer, the trader added.

Poly­mer buy­ers typ­i­cally have the op­tion to re­ceive large ship­ments over weeks or months.

“Ira­nian LLDPE typ­i­cally has no ad­di­tives, whereas the Viet­nam mar­ket want ad­di­tives. We need to make an ex­tra ef­fort to mar­ket to cus­tomers un­fa­mil­iar with Ira­nian prod­ucts,” the trader noted.

Ira­nian PE ex­ports to Viet­nam and South­east Asia have been very small in the last few years, in­dus­try sources noted.

Viet­nam PE de­mand is es­ti­mated to be 1 mil­lion-1.5 mil­lion tons per year, ac­cord­ing to traders and S&P Global Platts An­a­lyt­ics.


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