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Chinese traders: Banks reluctant to open L/Cs on transactions with Iran

by ChemOrbis Editorial Team - content@chemorbis.com
  • 12/05/2017 (15:52)
Traders in China report that they are facing difficulties in securing petrochemical goods from Iran nowadays due to the claim that China’s banks have started to impose some restrictions on opening letters of credit for transactions with Iranian parties.

A polyolefin trader argued, “Trading activities are quite slow in China given unsatisfactory demand amidst high stocks and weak futures. Sellers have limited cash flow and they mainly focus on local transactions nowadays. In addition to this situation, banks are restricting opening letters of credits for any trading activity involving Iran.”

A Shanghai-based trader also described the situation claiming, “Traders in China who are interested in securing Iranian cargoes now have to conclude deals on cash basis as banks do not allow them to open letters of credit. This is creating risks for both sides.”

However, it is noteworthy to mention that this claim has not been confirmed by official authorities and there are still several transactions reported for many Iranian products in the market this week.
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