Sources at Helm confirmed that a letter had been issued to customers during September alerting them to the change in policy, with the decision coming into immediate affect.
"The company management decided there would be no more business with Iran--either directly or indirectly. The decision came into effect immediately and will not be revised in the immediate future," a Helm source said.
A second company source said the decision had been motivated by a desire to reduce any possible risk involved in transactions with Iran, but that no official statement had yet been issued by Helm to confirm their position.
The decision is expected to affect supply of petrochemical products into Europe including monoethylene glycol, diethylene glycol and polyethylene terephthalate.
An MEG producer and consumer both confirmed the announcement, with the latter saying he expected to see the Northwest European MEG market tighten as a result.
"With Helm out of the market, there are almost no other players sending MEG from the Middle East," the source said.
The announcement followed a final decision from the European Commission in late September over countervailing duties to be imposed on PET originating in Iran, Pakistan and the UAE.
PET from Iran, Pakistan and the UAE would now face EU import duties of Eur139.70/mt (around $190/mt), Eur44.02/mt and Eur42.34/mt respectively.
Products such as polyethylene were also understood to have been affected by EU sanctions imposed in late July, with downstream consumers refusing to accept material produced in Iran.
Punitive measures included a ban on the sale of equipment, technology and services to Iran, hitting activities in refining, liquefied natural gas, exploration and production, according to the Official Journal of the European Union.
The EU sanctions also banned dual-use goods that could be used for conventional weapons, with vigilance to be increased over the activities of Iranian-connected banks operating in the EU.
"When the EU sanctions came out, customers were going back to the converters who make their film and bottles and saying, 'We will no longer accept any packaging that's made with Iranian product,'" a trader said late August.
"So that's the newest squeak in the supply chain that has evolved over the last few days...It's all politically driven, and it's become much more of a political issue," he added.
"Not just from Iran but from other areas now. It's the letters of credit--confirming LCs that are going through to Iranian entities--banks won't touch it."
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
