Uptrend in Iran's Petrochem Output, Export

Iran's petrochemical industry is on an upward trajectory, as data show an upswing in production and exports in recent months from last year's corresponding period.

"Production of petrochemicals and polymers in the first five months of the current fiscal year (March 21–August 22) has increased by 6% compared with the same period of a year ago," Mohammad Ali Bosaqzadeh, deputy for production control at the National Petrochemical Company, was quoted as saying by NIPNA.

"Domestic demand has increased this year with sales having increased by 8% in terms of value," he said.

The NPC official added that in the four months ending July 22, Iran exported 12% more petrochemicals in terms of tonnage from last year's corresponding period. Outbound shipments also registered a 4% increase in value terms.

Exports amounted to 7.1 million tons in four months, up nearly 5% from 6.84 million tons in the same period of last year.

Iran earned over $9.5 billion in revenues from petrochemical exports in the last fiscal, NPC data show. The petrochemical consignments went mostly to Asia, Europe and South America.

However, experts anticipate a decline in petrochemical revenues this year as payments by China, the largest customer of Iranian petrochemicals, have been hampered in recent months.

"The promising data come as production usually takes a dip in the first half of the year, as many petrochemical plants undergo maintenance and overhaul," Bosaqzadeh said.

The NPC official forecast that domestic companies will ratchet up annual production by 5 million tons by March next year from nearly 52 million tons in the previous fiscal.

"Almost 81% of the nominal capacity of all petrochemical plants were up and running in the last fiscal, but we hope that by the yearend, operating capacity will reach 85-86%," he said.

A slew of new petrochemical ventures are planned for launch by the end of the first quarter of 2018, raising Iran's installed petrochemical production capacity to 72 million tons.

"Collaboration with more domestic banks and attracting foreign investment will help speed up the construction of petrochemical projects," Bosaqzadeh said.

According to NPC officials, France's Total and Royal Dutch Shell are closing in on separate deals to bankroll new petrochemical projects in Iran.

Total and Iran reached a preliminary agreement this year to build three petrochemical plants, with a total capacity of 2.2 million tons, in a deal that, if finalized, could see the French oil major investing up to $2 billion in Iran.

Shell also signed an agreement with NPC last year on expanding cooperation in the key petrochemical industry.

The government said petrochemical industry, Iran's most important sector after oil and gas, requires $70 billion in investment, most of which should come from foreign sources.