"Iran Petrochemicals Report Q2 2016" Published

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

"Iran Petrochemicals Report Q2 2016" Published

PR-Inside.com: 2016-03-26 14:18:20

Iran is set to ramp up petrochemicals exports following the ending of international sanctions in January. The effects are likely to be global with a large amount of basic chemicals entering the market, leading to downward pressure on prices. However, the country still faces an uphill struggle with inward investment due to infrastructural and regulatory hurdles and will remain behind its Arabian Gulf competitors.

The country’s petrochemicals production capacity was around 60mn tonnes per annum (tpa) in 2015, but the shortage of natural gas as feedstock, ageing production units and the problem of sanctions, which reduced exports, have caused petrochemical complexes to work at lower capacities. Iran’s petrochemical output grew 10% year-on-year to 44.4mn tonnes in FY2014/15, implying capacity utilisation of 74%. Iran also increased petrochemical production by up to 2mn tonnes to about 46mn tonnes in 2015, but mostly by increasing feedstock and not launching new petrochemical plants.

Full Report Details at
www.fastmr.com/prod/1119022_iran_petrochemicals_report_q2.aspx?a ..

Projects that had been put on hold as a result of sanctions are likely to be revived and there is a probability that capacities will be greater. For 2020, BMI forecasts ethylene capacity at 12.3mn tpa with 8mn tpa of polyethylene (PE) capacity. Iran is the focus of intensive interest from investors in the petrochemicals industry, particularly European majors, but there is still an element of risk-aversion in spite of the hype. Additionally, economic structural problems, a slowdown in key export markets and the falling price of naphtha feedstock are deterrents for involvement in the ethane-fed Iranian petrochemicals sector. However, potential rewards are high with considerable Iranian upstream resources and a large domestic market that investors cannot afford to ignore.

Planned projects would raise Iran’s petrochemicals capacity three-fold to 180mn tpa by 2022, although it is uncertain whether this target will be reached. BMI expects the next five years to see the completion of the Olefins 11 and 12 project, which will have capacities of 2.0mn tpa and 1.2mn tpa respectively. Meanwhile, the USD12bn petrochemical hub at Chabahar – the Makran Petrochemical Plan – will add 1.2mn tpa of ethylene and 900,000tpa of PE.

Iran is faced with a number of external constraints to export growth. Lower petrochemicals prices will limit the amount of export revenue growth Iran will receive from petrochemicals. Low naphtha prices are also a setback for ethane-based production in Iran and its main export market, China, is exhibiting a downturn.

We forecast economic growth of 3-6% leading to a boost across a range of industrial sectors. Oil and gas will gain the most attention, but petrochemicals are also very well placed as the provider of raw material for growth industries, such as packaging and automotive sectors. Pent-up demand, a youthful population, a skilled workforce, and a large hydrocarbon and consumer story all make Iran one of the most positive and relatively well-balanced growth stories in the Middle East over the next decade.

This quarter, Iran has seen a 0.5 point increase in its overall petrochemicals Risk/Reward Index (RRI) score to 63.4 due to an 5.0 points increase in its market risk score. This comes following the lifting of sanctions, which will boost exports and encourage inward investment in the petrochemicals industry. However, significant obstacles to investment remain and further reform to investment regulations is necessary, alongside infrastructural improvements, if Iran is to match its Arabian Gulf neighbours. It remains in third place behind the UAE in the regional RRI rankings, but has increased its lead over Qatar.

The Iran Petrochemicals Report has been researched at source, and features BMI Research’s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI’s Iran Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Iranian petrochemicals industry.

Key Benefits

Benchmark BMI’s independent petrochemicals industry forecasts to test other views – a key input for successful budgetary and planning in the Iranian petrochemicals market.

Target business opportunities and risks in the Iranian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Iran.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI’s country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010&afid=701

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