About three months' accumulated volumes of low density polyethylene are expected to arrive in China from Iran in May due to earlier shipping delays, a source from an Iranian distributor said Wednesday.
"There are almost three months worth of cargoes that will arrive in May," he said. "Because shipments [from Iran] were delayed."
The source estimates that there will be "more than 100,000 mt on the way."
The source was non-committal over whether the delays were linked to the sanctions placed by the EU and US on Iran: "Maybe, but I am not sure," he said.
But the tightening restrictions of various international sanctions around Iran's financial and economic lifelines over its nuclear development program, have made it more difficult for countries and companies to pay Tehran for products they buy and to find vessels willing to call at Iranian ports.
China remains Iran's largest trading partner, especially for LDPE.
The abundant availability of Iranian LDPE gives local buyers a cheaper alternative to more costly cargoes from other regions. Due to the impact of sanctions on Iran-origin goods, they typically carry a discount to open-market prices.
In the first quarter of this year, China's LDPE imports from Iran stood at 55,995 mt, or about 15% of the total imports. In 2011, Iran LDPE cargoes accounted for 20.4% of China's import volume of 1.46 million mt.
Offers to China were heard as low as $1,220/mt CFR China for July cargoes, while bonded warehouse and May/June arrival cargoes were reported to be around $1,250-1,300/mt CFR China.
