Polymers in Iran are now becoming the capital commodities instead of the converting materials, since the market speculators by using the legal gaps and some negligence of the IMT Ministry are buying the materials through false demands and then by smuggling it to neighbouring countries change it to US$. These false demands and unrealistic tradings has grown up the material prices at domestic market.
According to PIMI, while the global markets for polymers have been affected by the Coronavirus crisis and demands in China has been decreased considerably, the Iranian polymer market continues to move in the opposite direction to the global market, without fear of the CONVID 19 crisis. The reason is due to relying on rising US$ values in Iran. In fact, in Iran, polymers have become a way to convert continuously devaluation Rials to US$ with ever incremental values. This operation are strongly followed by intermediaries and speculators, which has led to false demands and so has drastically increased the price of polymers.
In recent years, one of the ways to convert Iranian Rials into FOREX has been the purchase of polymers on the stock exchange and the smuggling of most of these goods over time across the Afghan and Iraqi borders into US$, which seems to require more oversight.
While, the downstream consumption in the Iranian market is quite clear, and with the offering volumes of petrochemicals on the stock exchange and buying much more than needed at a time when the US$ value is rising, the bitter reality becomes clear which is turning the Iranian Rials into FOREX, after buying from the stock exchange and smuggling polymer to the countries of Afghanistan and Iraq.
This is the pathway that has been paved in recent years at the time of the rising the US$ value by speculators with the support of those who direct the supply to the domestic market and so the Iranian polymer market direction has continued in the opposite direction of the Asian markets.
This route of smuggling, that is converting Rials to US dollars and investing the outcome abroad has always been supported by certain groups at the time of rising US$ value and its fluctuations in Iran.
As an example, last week, the Iranian polyethylene market began to behave strangely, because following the start of Coronavirus case in China and declining in polymer prices and demands there was a positive trend in the Iranian currency market following the corona start in China, with the daily rise and slope of polymers rising.
On the other hand, most analysts in recent days have failed to anticipate the Iranian polymer market, and they are just worrying about what is happening.
With the daily rise of the US$ value and the downturn of the downstream producers, the petrochemical market intermediaries have come to the fore to convert their Rials into US dollars. The group is well aware that rising dollar rates and lower dollar inflows to Iran affected by a decline in exports and blacklisting of FTAT could continue to help the value of US$.
