Home > Chemical News

Chemical News

Iran plans new petrochemical contracts on its oil bourse in Kish

https://www.chemnet.com   May 11,2011 Platts
Iran plans to launch new petrochemical contracts on the Iranian Oil Bourse on Kish island and is trying to promote existing and planned contracts, market sources told Platts Tuesday.

A forum to explain the contracts and the procedures for carrying out transactions on the exchange has been scheduled for May 28 at the Shangri La Hotel in Dubai.

"We plan to launch aromatics and polymers contracts. Plans for more contracts will be disclosed at the forum on May 28," a source familiar with the matter said. Iran already has several petrochemicals contracts ranging from polymers like HDPE and LDPE, and aromatics like orthoxylene and paraxylene on the Iran Mercantile Exchange in Tehran.

TRADERS SAY TRADE ON THE EXCHANGE WILL BE DIFFICULT

Prominent traders based in Dubai said that the exchange authorities will first need to define clearly the means of financial transaction on the bourse to be able to attract interest. "We have hardly dealt in the already existing petrochemicals contracts at the Iran Mercantile Exchange in Tehran. This is because the banks refuse to finance such deals. So unless there are new means for ensuring a safe financial transaction, we will not be able to trade at the exchange," one of the largest traders of Iranian petrochemical products, who is based in Dubai said.

"If it's physically backed contracts that the exchange plans to launch then there are several issues to be looked into. Like which vessels will take delivery as Iranian-flagged vessels make financing difficult," another Dubai based trader said.

Financial sanctions spearheaded by the US have been imposed on Iran over its nuclear program.

"There are solutions to these problems and they will be discussed on May 28," a source close to the forum's organizing committee said. The forum will be organized under the banner of the Iran Business Council in Dubai.

GASOLINE CONTRACT FAILS TO TAKE OFF

Iran failed to find a buyer last Tuesday for gasoline offered for the first time to the open market on the Iranian Oil Bourse.

Iran offered 20,000 mt of gasoline at the base price of $1,041.86/mt, but it remained on the shelf even after National Iranian Oil Products Refining and Distribution (NIORDC) cut the price by $5/mt, the semi-official Mehr news agency reported. The 87-octane gasoline came from the southern Bandar Abbas oil refinery.

Iran has said that it now has surplus gasoline after ramping up domestic production, and in late April said it exported several gasoline cargoes to Afghanistan. In anticipation of rising gasoline exports, Iranian officials also announced plans to include a gasoline contract on the Iranian Oil Bourse.

Iranian Oil Bourse was launched on February 17, 2008 with a trade of 2,200 mt of LDPE.

 Print  |    add to Favorites  |    Close