On July 13, local time, Iran Customs officially issued new regulations to adjust the export bans on chemical and petrochemical products issued during the domestic state of emergency. The export of chemicals, polymers, and petrochemical products has been fully liberalized, while export controls on industrial tallow and sulfonic acid remain in place. The policy balances the recovery of foreign trade with the guarantee of key domestic industrial raw materials.

According to this customs directive, the total export ban on chemicals, polymers, and petrochemical products previously enforced under the state of emergency has been officially lifted, and relevant goods can resume normalized export customs clearance.

The petrochemical and chemical industries are the core pillars of Iran's foreign trade. This large-scale relaxation of restrictions helps repair the petrochemical foreign trade chain, revitalize production capacity for export, and stabilize the country's overseas supply channels for chemical products.

This policy does not fully liberalize export permissions.

Iran Customs has explicitly stipulated that the two categories of industrial tallow and sulfonic acid will continue to be subject to original strict export controls and will not be opened to export for the time being. As of now, Iran Customs has not announced a timetable for adjusting the control policies for these two restricted products, and subsequent changes await official announcements.

Brief Introduction to Relevant Chemical Categories

I. Main Categories Liberalized for Export This Time

1. Petrochemical Products

Basic raw materials produced using crude oil and naphtha as feedstocks, covering ethylene, propylene, aromatics, alcohols, solvents, etc. They are the foundational raw materials for the entire manufacturing industry and are widely used in plastics, coatings, chemical fibers, rubber, fuel processing, and other fields.

2. Polymers (Synthetic Resins)

Includes general plastic raw materials such as polyethylene, polypropylene, polystyrene, and PVC. They can be processed to manufacture packaging films, pipes, appliance casings, textile fibers, and daily necessities. Global trade volume is huge, and these are also Iran's main exported chemical products.

3. Various Basic Chemicals

Inorganic chemical raw materials, fine chemical intermediates, additives, etc., with applications covering construction materials, pharmaceuticals, pesticides, water treatment, and many other industries.

II. Products Subject to Continued Export Controls

1. Industrial Tallow

Distinct from edible tallow, it is mostly used in industrial scenarios such as lubricating greases, metalworking lubricants, soaps, rubber additives, and leather processing. It belongs to the category of basic industrial raw materials for oils and fats, ensuring the stable operation of domestic lubrication and manufacturing industries.

2. Sulfonic Acid (Mainly Alkylbenzene Sulfonic Acid)

A core raw material for anionic surfactants with outstanding detergency, emulsification, and wetting properties. It is a key raw material for laundry detergents, dishwashing liquids, industrial degreasers, textile auxiliaries, and pesticide emulsifiers, belonging to an indispensable intermediate for the daily chemical and cleaning industries.

III. Global Flow of Relevant Chemical Products Liberalized by Iran This Time and Trade Structure with China

Major Export Countries and Regions for Iran's Petrochemicals/Polymers

The trade flow for Iran's liberalized categories is primarily towards Asia, followed by Middle Eastern neighbors and South Asia. Direct procurement scale by Europe and the US is very small:

1. China: The largest overseas buyer of Iranian petrochemical products, accounting for approximately 25% to 32% of Iran's total direct petrochemical exports; large quantities of methanol, polyolefins, and ethylene glycol are shipped directly to China.

2. India: The second-largest market, focusing on the procurement of polyethylene, polypropylene, urea, and aromatics, mostly used in plastic processing and fertilizer industries.

3. Turkey, Iraq: Core distribution hubs in the Middle East; some is consumed locally, and some is re-exported to surrounding Central Asia and North Africa.

4. UAE, Oman, Malaysia: Important transit ports where many Iranian chemical products are transshipped and distributed to Southeast and East Asian countries.

5. Southeast Asia (Vietnam, Indonesia, Thailand): Continuously procuring general plastic raw materials, solvents, and basic chemicals.

Key Import Varieties and Shares for China (China's Imports from Iran)

1. Methanol (Largest Single Item)

Iran is a major global exporter of methanol, with 70% to 75% of Iran's methanol exports flowing to China;

About 50% to 60% of China's total methanol imports originate from Iran, serving as the core raw material for domestic MTO (Methanol-to-Olefins) units.

2. Polyethylene PE (LDPE High-Pressure Material is Most Representative)

Iran's annual PE exports are about 2 million tons, with direct imports to China accounting for 40% to 50% of Iran's total PE exports;

In China's total LDPE imports, Iranian supply accounts for 13% to 14%, mostly used for agricultural films and packaging blown films.

3. Ethylene Glycol MEG

Iran's MEG exports to China account for over 70% of its total exports, supplying the domestic polyester and chemical fiber industries.

4. Polypropylene PP, Aromatics (Benzene, Toluene), LPG (Propane/Butane)

Stable exports to China, accounting for 5% to 10% of the total domestic imports of the same category.

5. Urea, Synthetic Ammonia, and Other Fertilizer Raw Materials

The scale to China is limited; the larger export markets for this category are concentrated in India, Brazil, and Turkey.

Summary: China's chemical imports from Iran are supported by three main pillars: methanol, polyethylene, and ethylene glycol; these are also the varieties most likely to quickly resume shipping after the lifting of this export ban.

Maintained Controlled Categories: Sulfonic Acid (LABSA Linear Alkylbenzene Sulfonic Acid), Industrial Tallow

1. Sulfonic Acid (Core Detergent Raw Material LABSA)

Main flows during traditional normal trade periods: Pakistan, Central Asia (Uzbekistan, Kazakhstan), Turkey, Iraq; small quantities sold to Southeast Asia.

China rarely imports sulfonic acid from Iran. Domestic LABSA production capacity is sufficient, relying mainly on local production and small purchases from Southeast Asia and South Korea; Iranian sulfonic acid is not a mainstream source for the domestic market.

Core demand for Iran's export restrictions: Prioritize guaranteeing the supply of raw materials for domestic detergents, daily chemicals, and textile industries.

2. Industrial Tallow

Belongs to the category of oil and fat industrial raw materials; under normal circumstances, it is mainly supplied to neighboring countries and Central Asia; there are almost no large-scale records of trade with China. Domestic sources of industrial oils and fats for industrial lubrication and soap making are mainly from Southeast Asia and the Americas.

IV. Summary of Key Trade Characteristics

1. The liberalized categories show clear differentiation: Methanol, polyethylene, and ethylene glycol are highly dependent on the Chinese market; urea and general polymers are more supplied to South Asia and the Middle East.

2. The two controlled products (sulfonic acid, and industrial tallow) do not have a large trade volume with China, so the continued export controls have a limited direct impact on China's industrial chain; the policy constraints act more on the daily chemical and lubrication manufacturing industries in Central and West Asia.

3. Historically, Iran has temporarily shut down petrochemical exports multiple times; once the ban is lifted, methanol and LDPE are often the first to resume shipments to China and are also the varieties receiving the highest attention in the commodity market.

Analysis suggests that Iran's approach to this differentiated regulation is clear: exchanging foreign exchange and activating the industrial chain by liberalizing the export of bulk petrochemical products; while locking down the export of essential raw materials like industrial tallow and sulfonic acid to prioritize the supply of raw materials for local manufacturing and daily chemical/cleaning industries, preventing supply shortages caused by the outflow of key domestic raw materials.

The market will continue to track policy developments regarding the two controlled products and the recovery of Iran's petrochemical export orders.

From:ChemNet