Published On: Thu, Mar 7th, 2013

Iranian sellers turn to Turkey before Nowruz holiday

Iranian sellers turn to Turkey before Nowruz holiday

Iranian sellers turn to Turkey before Nowruz holiday

Iran is preparing to celebrate the week long Nowruz holiday around March 21. Ahead of the beginning of the year according to the Iranian calendar, sellers are said to be trying to deplete their stocks these days as per the pricing service of ChemOrbis. Nevertheless, players widely report that logistics issues are creating an obstacle to smooth deliveries from Iran to Turkey.

A source from an Iranian trading company said, “Exporters need to receive permission from the government to take material out of the country and these permissions are valid only for a short period of time and for a set amount of material. If the material is not exported on time, the sellers must apply for another export license and it takes around 3-10 days.”

Indeed, players in Turkey have been complaining about the delivery problems from Iran for the past few weeks. “The problem is that trucks come full but they return empty, which causes congestion on the logistics side and naturally pulls the freight rates higher,” commented a trader. Freight from Iran has moved higher by at least $40-50/ton, according to market sources. “Because of this unexpected increase in freight rates, we have had to sell some our products with no margins,” said another trader in Turkey.

The approaching Nowruz holiday in Iran is also pushing sellers to deplete their stocks and make aggressive sales ahead of the new year. Although Iranian PP is not a regular and common source of supply for the Turkish market, a market source said, “Iran has approved up to 7,500 tons of PP exports to Turkey.” Accordingly, Iranian PP fibre offers have been showing up in the Turkish market for the past two to three weeks at prices forming the low end of the overall market range.

Nevertheless, a distributor thinks that their destocking activity will not make a big impact on the Turkish market due to the problems on the delivery side. “New shipments from Iran will be sharply lower after next week as many players will start to go to the sidelines prior to the holiday,” commented another distributor.

Iran is the second largest supplier of HDPE to Turkey, according to ChemOrbis Import Statistics for 2012, with more than 180,000 tons of imports. In the LLDPE market, Iran is the third largest supplier although its portion is way below Saudi Arabia, which is in first place.