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Recently Released Market Study: Iran Petrochemicals Report Q3 2012

New Energy research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 06/29/2012 -- The Iran Petrochemicals Report examines the impact of the international sanctions regime on the performance and development of downstream operators, paying particular attention to producers' export performance, credit availability and access to technology.

The report assesses progress so far in ongoing projects and how the government is attempting to overcome restraints and the withdrawal of several foreign partners with exposure to North American and European markets in order to raise national petrochemicals capacity to 100mn tonnes per annum (tpa) by 2016.

BMI forecasts that by 2016, ethylene capacity will total 11.08mn tpa, with the expected completion of the Olefins 11 and 12 projects, which will have capacities of 2.0mn tpa and 1.2mn tpa respectively. Other capacities including 7.06mn tpa of PE and 1.29mn tpa of PP. LDPE will contribute 43% of the 3.7mn tpa expansion in the PE sector, followed by HDPE (33%) and LLDPE (24%).

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Over the long term, operating rates can only be raised through market diversification, a process that is severely curtailed by the sanctions regime imposed by the US and the UN. Asia, particularly China, represents around 37% of exports, while the Middle East comprised 25%, South Asia 18% and Europe 11%. The dependence on the Chinese market could cause problems for Iranian petrochemicals producers as it slows. Market growth is particularly limited in the petrochemicals-intensive automotive and electronics segments, where investment has been severely curtailed. Even with strong export growth, the anticipated moderation in domestic consumption over the medium term means that polymer plants will continue to operate well below nameplate capacity; Iranian producers had said that plants were not performing at full capacity owing to technical problems.

Over the last quarter BMI have revised the following forecasts/views:

- Iran has risen one place to fifth place in BMI's proprietary Middle East and Africa Petrochemicals Ratings due to a 0.5 point rise to 56.9 points. This places it 0.3 points ahead of Israel and 3.3 points behind Qatar.
- The Jam Petrochemicals Complex was reportedly operating above its nameplate capacity with polymer units, including 300,000tpa HDPE and LDPE, operating above 11-20% of their capacity; in April 2012 Jam Petrochemical started up its 115,000tpa butane-1 unit that will supply feedstock to light PE units.
- Low levels of production seen in some petrochemicals complexes is in part due to lack of feedstock availability, a situation that may be resolved when output at the South Pars gas field picks up over the next two years. The goal is to raise proportion of total natural gas allocated to the petrochemicals industry from 7% to 25% by 2015.

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