China is expected to see an influx of polyethylene from Iran this month, after an absence of product from the Middle Eastern country since early October, market sources said.
An estimated 100,000-150,000 mt of high density and low density PE is expected to arrive in China within a month via five vessels, China-based sources said, with one tanker -- the Touska/0160 -- already beginning to discharge HDPE and LDPE at the Shanghai port over the weekend.
"The Iranian materials have been absent from the market for a few months due to a delay in shipments and port congestion [in Iran]. As a result, [spot] prices have been firm," said one China-based trader.
"However, with the arrival of these cargoes, PE prices, especially HDPE and LDPE in particular, will be under pressure," he added.
Asian HDPE and LDPE prices have been rising since the middle of November last year, gaining 7.8% and 5.4% respectively, to close at $1,455/mt CFR Northeast Asia and $1,423/mt CFR Northeast Asia January 21, according to Platts data.
In addition to port congestion in Iran, the Middle Eastern country's exports of PE -- among other products -- were also halted briefly last year.
Iran's Consumer and Producers Protecting Agency, a quasi-governmental body, wrote at the end of October to companies dealing in Iran-origin petrochemicals telling them that PE, PP, PVC, PS, PP, PET, polycarbonates and epoxy resins were among 50 industrial and agricultural products restricted from export from November. But the country's government quickly reversed the order and lifted the ban on most of the products, including PE, on November 6, Platts reported previously.
In addition to cargo arrivals from Iran, spot PE prices are also expected to be pressured by slowing demand in China due to the Lunar New Year holidays that begin February 10, with several smaller downstream plants already heard to be halting operations for the holidays, sources said.
