Polymer exports are projected to reach $3 billion by the end of the current fiscal year (March 2022) not only because of the rise in petrochemical product prices, but also due to the removal of global restrictions related to the pandemic, according to the head of the National Association of Polymer Industries’ board of directors.
“Polymer industry accounts for 3.5 million tons of the total petrochemical production capacity that stands at 90 million tons per annum,” Saeed Torkaman was also quoted as saying by IRNA.
“The industry accounts for 2.2% of Iran’s non-oil exports, while the installed capacity for polymer products is more than 20 million tons, of which only 3.5 million tons are produced per year and 2.5 million tons are exported,” he said.
“In 2020, we had a decline in polymer exports, which reached about $2.5 billion. Nonetheless, this year, the figure will approach $3 billion.”
According to the official, Iran’s polymer industry accounts for 1.5% of GDP and 3.6% of employment.
“Exports of complementary petrochemical industries were about $2.7 billion. Complementary industries can be an attractive market for the petrochemical industry, as they can also help generate revenues for the country,” he said.
“Cost is a major obstacle for the export of polymer products. Domestic manufacturers supply their raw materials at high prices, which deprive them of a competitive advantage in export markets.
The lowest prices are found in Southeast Asia and the highest exports of raw materials also happen in that region. Competitors in China get raw materials at lower prices and take away the competitive edge of Iranian producers.
Iran ranks first in the export of polymer products to Armenia, second to the Republic of Azerbaijan and sixth to Pakistan.
Iran currently exports plastic and polymer products to the Middle East and Asia-Pacific region, and is planning to enter African markets
“Iran currently exports plastic and polymer products to the Middle East and Asia-Pacific region, and is planning to enter African markets.”
The Oil Ministry said it has a roadmap for getting a bigger share of the international polymer and plastic markets.
Currently, almost 30% of all automotive components are being made from polymers. And with the rising demand for electric vehicles, the polymer market is expected to grow further, as these materials are used to make lightweight battery packs.
As a result of growing concerns regarding air pollution, the need for lightweight vehicles, preferably electric variants, is driving demand for polymers.
During the Covid-19 crisis, automotive plants across the world were shut down, in compliance with government mandates, which drastically reduced demand for various raw materials.
However, demand for polymers and plastics in food processing, packaging, pharmaceutical and personal care sectors is still strong.
International customers take advantage of sanctions imposed on Iran to seek bargains and more discounts. Forex repatriation costs more due to the rise in money transfer expenses and changes in Iran’s export destination markets, all of which have led to a decline in polymer export revenues.
“To increase exports, we suggest a revision of the pricing of polymer products by the government. Also, producers have to pay more attention to design, printing and packaging, and make use of different ways of sales and payments,” Torkaman said.
