Global discussions on tougher trade sanctions against Iran have created
some hurdles to petrochemical trade with the Middle Eastern state, industry
sources in Asia said Tuesday.

While a large number of petrochemical companies across Asia continue to
take delivery of Iran-origin cargoes, some direct dealings with Iranian
producers have encountered difficulties because an increasing number of
commercial banks have become wary of facilitating trades with Iranian
companies.

Two Japanese trading firms said they have used the euro as the currency
of trade with Iran since early this year, rather than the US dollar. But in
the past few months, several western banks have begun to steer clear of
facilitating transactions with Iran, regardless of the currency used, sources
said. In certain cases, buyers and sellers have been forced to seek
alternative banks to complete the deals.

Indonesian monoethylene glycol producer PT Polychem cannot take delivery
of ethylene cargoes from Iran because its London-headquartered bank HSBC will
not facilitate the banking procedures.

But even with banking complications on the rise, a number of
petrochemical companies said they were not ready to turn their backs on
Iranian supplies.

"We follow trade restrictions set by the United Nations--such as
military- and nuclear-related items--but won't volunteer more sanctions," a
large Japanese trading firm said.

A UK company's branch office in Singapore said it had no plans to
terminate existing term contracts with Iran but since mid-year, new business
with Iran had come under new internal scrutiny. This aside, "when we buy a
cargo on a CFR basis, we do not restrict its origin. If our receiver can
accept cargoes from Iran, [we can too]."

The Philippine government requires local companies to apply for permits
before importing chemical cargoes from Iran and Libya. But the permits are
usually granted right away, polyolefins producer JG Summit said.

Last year, Iran's state-owned National Petrochemical Co. even bought a
60% share in Philippine polyethylene company Bataan Polyethylene, which has
since been renamed NPC Alliance Corp. NPC Alliance now buys some of its
ethylene from feedstock from Iran.

Iran regularly exports ethylene, monoethylene glycol, polyethylene,
methanol and benzene.

On October 25, the US imposed trade sanctions on three of Iran's largest
state-owned banks--Melli, Mellat and Saderat--over Tehran's alleged nuclear
weapons campaign and terrorist financing. All financial transactions between a
US citizen or private organization with the three banks have been embargoed
since.

--Joanna Lim, joanna_lim@platts.com