After the German bank refused to issue a credit card, an Iranian polyethylene pipe production company had stopped importing HDPE materials from Germany. The company consumes about 35,000 tons of HDPE annually, and 90% of it needs to be imported. In the past, most of the company’s HDPE imports were from Germany. Now it is able to obtain credit from the Korean banks and begin importing HDPE materials from Korean companies. Another Iranian large chemical trading company also indicated that it would consider choosing a source of imports from Asia. If the nuclear issue cannot be resolved quickly, Iran’s more companies needing to import will also switch to Asian procurement.
However, the Iranian petrochemical commerce company (IPCC) of Iranian National Petrochemical Company will not be affected by the above credit restrictions because it has its own funds in European banks. If it fails to meet all the needs of users, IPCC also needs to purchase some petrochemical products, but so far has not encountered such problems.
From April to September last year, the total output of Iranian petrochemical products was 10 million tons and exports were 3 million tons. Because of the insufficient production of certain domestic products to meet local demand, Iran also needs to import some polymer and solvent products. For example, although 80,000 tons of polystyrene can be produced each year, Iran still needs to purchase several thousand tons of polystyrene each year to make up for the lack of self-supply.
Nuclear Incident Turns Iranian Petrochemical Trade to Asia
Influenced by the Iranian nuclear incident, international banks in Europe and the Middle East have not only tightened their credit terms for Iran, they have even refused credit guarantee commitments. Iran’s petrochemical companies have difficulty obtaining credit guarantees from a number of European banks and have turned to Asia to seek credit.