Iranian Customs Lifts Export Ban on Chemicals, Polymers, and Petrochemicals; Strictly Controls Industrial Tallow and Sulfonic Acid

According to this customs directive, the total export ban on chemicals, polymers, and petrochemical items 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 extensive relaxation of restrictions helps repair the petrochemical foreign trade chain, revitalize production capacity to export, and stabilize the country's overseas supply channels to chemical items.

This policy does not fully liberalize export permissions.

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

Brief Introduction to Relevant Chemical Categories

I. Main Categories Liberalized to Export This Time

1. Petrochemical items

Basic raw materials produced using crude oil and naphtha as feedstocks, covering ethylene, propylene, aromatics, alcohols, solvents, etc. They are the foundational raw materials to the entire manufacturing sector and are broadly utilized 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 items.

3. Various Basic Chemicals

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

II. items Subject to Continued Export Controls

1. manufacturing Tallow

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

2. Sulfonic Acid (Mainly Alkylbenzene Sulfonic Acid)

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

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

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

The trade flow to 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 items, accounting to approximately 25% to 32% of Iran's total direct petrochemical exports; substantial quantities of methanol, polyolefins, and ethylene glycol are shipped immediately to China.

2. India: The second-largest market, focusing on the procurement of polyethylene, polypropylene, urea, and aromatics, mostly utilized 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 adjacent Central Asia and North Africa.

4. UAE, Oman, Malaysia: crucial transit ports where many Iranian chemical items 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 to 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 to 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 to 40% to 50% of Iran's total PE exports;

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

3. Ethylene Glycol MEG

Iran's MEG exports to China account to 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 to 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 to 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 rapidly resume shipping after the lifting of this export ban.

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

1. Sulfonic Acid (Core Detergent Raw Material LABSA)

Main flows during traditional healthy 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 regional production and small purchases from Southeast Asia and South Korea; Iranian sulfonic acid is not a mainstream source to the domestic market.

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

2. manufacturing Tallow

Belongs to the category of oil and fat manufacturing raw materials; under healthy circumstances, it is mainly supplied to neighboring countries and Central Asia; there are almost no extensive records of trade with China. Domestic sources of manufacturing oils and fats to manufacturing 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 greater supplied to South Asia and the Middle East.

2. The two controlled items (sulfonic acid, and manufacturing tallow) do not have a substantial trade volume with China, so the continued export controls have a limited direct impact on China's manufacturing chain; the policy constraints act greater 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 manufacturing chain by liberalizing the export of bulk petrochemical items; while locking down the export of essential raw materials like manufacturing tallow and sulfonic acid to prioritize the supply of raw materials to regional 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 items and the recovery of Iran's petrochemical export orders.