Petrochemical Exports Up 26%

Petrochemical Exports Up 26%Petrochemical Exports Up 26%

National Petrochemical Company's export volume experienced a 26% rise compared with the corresponding period of last year, NPC's coordination and supervision director said.

“More than 60% of petrochemical complexes' output have been exported to target destinations,” Ali Mohammad Bosaqzadeh was quoted as saying by Shana on Monday.

According to the official, more than 43 million tons of petrochemical commodities were manufactured by February 2016 and plans call for raising the production to 46 million tons by the end of the current Iranian year (ending March 19, 2016).

Noting that nominal production capacity exceeds 79%, Bosaqzadeh said the capacity is projected to register a 6% growth compared to that of last year, but the ambitious goal cannot be reached unless the much-need investment is raised.

"The cost of exporting petrochemical products is expected to decline, as negotiations are underway with shipping companies to provide petrochemical units with better logistic facilities in the near future to boost export competition," he said.

Asked about NPC's plans to raise production in 2016, the official noted that after the enforcement of the Joint Comprehensive Plan of Action, the import of petrochemical goods and equipment has become easier, therefore a noticeable rise in production is predictable.

Stressing that petrochemical goods were sold indirectly through various institutions in the past, Bosaqzadeh said, "In the post-sanctions era, foreign exchange transfer fees will decrease.

"The generated revenue can be spent on purchasing cutting-edge production technology at more reasonable prices and domestic enterprises will be more enthusiastic to raise output, a part of which can be exported to target destinations," he said.

"The proportion of export value to domestic sales next year may equal that of this year."

Bosaqzadeh believes that a drastic decline in oil prices and the subsequent 20% fall in petrochemical prices caused petrochemical export value in 2014 to be the same as in 2015.

Last year's export value stood at $11 billion.

Underscoring the lack of liquidity in petrochemical industry, which has led to a deep economic recession, the official added that 45% of petrochemical products are used domestically. He noted that as per NPC rules and regulations, petrochemical producers must first supply domestic industries and then plan for export.

"Export should be producers' second priority because as long as the downstream sector's needs are not met, export licenses will not be issued," he said.

According to the official, negotiations are underway between NPC and the Ministry of Industries, Mining and Trade so that domestic needs are satisfied effectively.

"The administration is required to adopt efficient policies to inject more liquidity into the industry," he said.

According to an NPC report, Iran aims to sell 93 million tons of petrochemicals worth $61 billion under the sixth five-year development plan (2016-21).

In line with the plan, petrochemical projects, worth $37 billion, have been offered to foreign and domestic investors.

Petrochemical products are Iran's second biggest source of income after crude oil, but officials are confident that Iran can earn more money from petrochemicals than it makes from oil.