Tight Iranian PE supply might persist as plants reel under curse of gas leak

Asian players have been reporting serious delay of Iranian PE cargoes over the past couple of months as a number of producers here are facing production disruption. Many shipments were initially scheduled for September, have now been postponed to November, causing a general tightness especially for HDPE across Asia region.

Iranian traders are blaming the disruptive production status to the lack of upstream supply, deriving for the recent pipeline break down at the South Pars gas field. Repairing works to bring gas supply back to normal was initially planned to complete in September, could extend into November, industry participants said.

Several petrochemical plants in the adjacent location are affected as shown in the following table. At the time this report is published, there has not been any concrete plan of to when these units would be able to resume normal production.

An Iranian trader informed, “We started to clear backlogs, however, it might take several months to fulfil all the previous orders. We hope supply would normalise by end o this quarter.”

“We are not expecting a heavy influx of Iranian cargoes until beginning of next year given the current low production status and a high number of backlog. This would restrict supply in the market and prevent prices from any major correction,” another trader commented.