Iranian ethylene pipeline returns after floods

Operations at Iran's West Ethylene Pipeline are now operational two months after damaging floods hit parts of the country.

The pipeline was damaged at the end of March following the floods, with repairs taking longer than expected as flood waters took time to fully subside.

The pipeline, which runs from the Mideast Gulf port of Assaluyeh to Mahabad, supplies feedstock to several polymer plants in Iran. Polyethylene (PE) plants connected to the pipeline are now starting to produce polymers with their feedstock access restored. The PE plants ran at extremely low operating rates in April and temporarily stopped production in the immediate aftermath of the floods.

Iran produces most commodity grades of PE, including low-density polyethylene, linear low-density polyethylene and high-density polyethylene film.

These plants are expected to increase production quickly in the coming weeks and push out volumes quickly to China, a key export market. But China's PE import market remains weak with domestic buyers preferring to buy yuan-denominated cargoes from domestic producers because of volatility in the Chinese currency.