Pending a lifting of sanctions on Iran, the country could divert 20% of its polymer exports to Europe – giving stiff competition for the GCC countries
In an article posted on the website of chemicals journal ICIS, market sources are cited as saying that Iran may decide to divert up to a fifth of its polymer from a waning Chinese market.
However prices are volatile across Europe, and buyers are treating imports with caution – typically buying smaller shipments for fear of price changes.
One European buyer is quoted saying: “Imports are not cheap enough. Why should I take that kind of risk?”
The article states that Germany, Italy and Spain are Iran’s targets for exports, and that suppliers in the GCC are expecting renewed competition from Iran after the sanctions are lifted
“We expect stiff competition from Iran. Once the sanctions are lifted, we know the Iranians will come to Europe aggressively,” said a Saudi Arabia-based polymer supplier.
“Our intelligence tells us Iran is already ramping up production ahead of the lifting of sanctions. GCC suppliers will be affected by a resurgent Iran.”
The sanctions were placed due to suspicions that Iran was developing a nuclear weapon. The country is now expected to re-join the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network as early as the end of this year.
One major polypropylene supplier in Iran is quoted in the article saying that the country could may ship its produce to neighbouring Turkey, making Istanbul its passage into Europe.
The Tehran-based supplier said: “We are waiting for SWIFT, so that's why at the moment we can't send huge cargoes [to Europe].”