DUBLIN--(BUSINESS WIRE)--Research and Markets(http://www.researchandmarkets.com/research/d6758c/iran_petrochemical) has announced the addition of the "Iran Petrochemicals Report Q1 2012" report to their offering.
The international sanctions regime is beginning to bite Iran's petrochemicals sector as investment dries up, technical and equipment problems mount, feedstock problems abound and the industry struggles with growing labour disputes, according to BMI's latest Iran Petrochemicals Report.
The industry is struggling with feedstock shortages caused by lack of progress in upstream developments, technological failures and defective equipment. Iran's petrochemical industry was operating at 85% run rates, according to reports in Q411. Production was running at the equivalent of 46mn tpa, well below installed capacity of 54.5mn tpa.
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.
Global technology licensers have stopped doing business with Iran in order to maintain business interests in the US. Meanwhile, the complexity of raising finance from abroad as a result of the sanctions regime has deterred global banks. As a result, foreign investors are increasing nervous about the prospects for the Iranian petrochemicals sector with South Africa's Sasol reviewing its Iran operations and has no plans to expand in the Middle Eastern nation.
The focus of investment over the next five years (to 2017) will be the 15th, 16th and 17th olefins complexes and several methanol and ammonia and urea projects. The problems facing the petrochemicals industry make it unlikely that Iran will reach its target of 100mn tpa petrochemicals capacity by 2016. BMI also casts doubt on the forecast of 60mn tonnes output in FY2011/12 based on NPC's plans to raise capacity by 8mn tpa, which would represent an increase of 42% y-o-y.
BMI anticipate growth of 16% to just under 49mn tonnes, based on both capacity expansion and overall utilisation of current capacity. The NPC has projected that 45% of output will be exported, up from 42% in FY2010/11 when 18mn tonnes was exported, worth US$11.6bn. Based on its forecast, this would mean 27mn tonnes of exports. However, rising domestic demand and faltering output growth may undermine that objective. BMI forecasts exports totalling 20mn tonnes in the current Iranian year, up 11% y-o-y.
As BMI does not foresee an improvement in operating rates under the current climate, the Iranian petrochemicals industry will remain effectively loss making and reliant on government subsidies, which makes it vulnerable to anti-dumping duties. Some Iranian petrochemical exports are already subject to anti-dumping measures in competitor markets, such as ammonia fertiliser exports to India and PET exports to the EU.
Key Topics Covered:
- Executive Summary
- SWOT Analysis
- Global Petrochemicals Overview
- Iran Market Overview
- Industry Trends And Developments
- Industry Forecast Scenario
- Company Profiles
- BMI Methodology
- Business Environment Ratings
Companies Mentioned:
- Karoon Petrochemical Company
- National Petrochemical Company (NPC)
For more information visit http://www.researchandmarkets.com/research/d6758c/iran_petrochemical