Business Monitor International


Iran Petrochemicals Report

Published 30 January 2015

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Iran Petrochemicals Report

The easing of sanctions will have a positive effect on the Iranian petrochemicals industry with hope for improved growth in output, according to BMI's latest Iran Petrochemicals Report. However, weak external markets, the declining cost differential between naphtha and ethane and domestic feedstock constraints will undermine government targets in 2015.

Although Iran began exports to the EU in January 2015, the collapse in crude prices and their effect on naphtha prices has undermined the competitiveness of the country's largely ethane-fed petrochemicals industry. Additionally, Iran is expected to undershoot the government's production and export targets for FY2014/15, undermining the credibility of its petrochemicals development programme. The main reason for the failure of the government's programme is the deleterious effect of prolonged sanctions, which deterred investment and caused domestic economic decline. Any resumption of sanctions will cause further negative effects on the industry.

While the plants may nominally come on stream, operation rates are likely to be low and plants will be operating at a loss unless Iranian producers can pass on the full costs of production onto consumers in export markets. To operate at reasonable levels of capacity utilisation, olefins output would have to increase by a third and polymers by a third, but the demand may not exist and may not have existed even without the sanctions regime.

  • Resumption of exports will also help raise Iran's share of the Middle East's production output from 25% in 2014, although there are still doubts that it will reach its target of a 41% regional market share by 2020.

  • BMI forecasts that by 2019, ethylene capacity alone will total 11.08mn tpa, with the completion of the Olefins 11 and 12 projects, which will have capacities of 2.0mn tpa and 1.2mn tpa respectively.

  • This quarter, Iran has risen from fifth to third place as a result of improved risk index scores. Its petrochemicals...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Table: Iran's Petrochemicals Industry, 2012-2018 ('000 tpa, Unless Otherwise Stated)
18
Macroeconomic Forecasts
19
Economic Analysis
19
Table: Iran - Economic Activity
25
Industry Risk Reward Ratings
26
MEA Petrochemicals Risk/Reward Ratings
26
Table: MEA Petrochemicals Risk/Reward Ratings, Q314
28
Iran Petrochemicals Risk/Reward Ratings
28
Market Overview
30
Table: Iran's Cracker Capacity, 2012-2018 ('000 tpa)
32
Industry Trends And Developments
34
Current plans
35
Sanctions And The Petrochemicals Industry
38
Privatisation
40
Company Profile
41
National Petrochemical Company
41
Regional Overview
45
Middle East And Africa Overview
45
Looking To Asia
46
Diversification The Long-Term Focus
48
African Growth Focused In The North
48
Global Industry Overview
52
Table: Top 10 Ethylene Producers, 2013
55
Latin America: The Main Loser In US Expansion Drive
56
Asia: New Growth Markets Fuel Global Demand
57
Challenges For The Arabian Gulf
58
Russia And CIS: Coming To The Fore
58
Gasoline
60
Table: BMI Gasoline Price Forecast, 2012-2018
60
Weak Q114 For Gasoline
61
Europe And The US: Competitive Market To Limit Summer Gains
62
Asia: Market Rebalancing To Better Support Market
65
Risks To Outlook
68
Diesel
68
Table: BMI Crude Oil And Diesel Price Forecast (USD/bbl)
69
New York's One-Off Heat Up
69
NY: Short-Term Diesel Price Support Expected
72
Rotterdam: Green Policies Drive Diesel Forward
76
Singapore: Diesel Support With Power Risks
78
Risks To Outlook
82
Jet Fuel
83
Table: BMI Crude Oil & Jet Fuel Price Forecast, USD/bbl
83
Better Outlook Tames Price Fall
83
Table: Total Air Freight And Passenger Volume Growth
85
Risks To Outlook
88
Bunker fuel
89
Table: BMI Crude Oil & Bunker Fuel Price Forecast (USD/bbl)
89
The Storm Clears For Shipping
90
(Slightly) Better Times For Bunker Prices
92
Long-Term Threats Linger
93
Pressing Rotterdam & New York Harder
95
Risks To Outlook
95
Demographic Forecast
97
Table: Iran's Population By Age Group, 1990-2020 ('000)
98
Table: Iran's Population By Age Group, 1990-2020 (% of total)
99
Table: Iran's Key Population Ratios, 1990-2020
100
Table: Iran's Rural And Urban Population, 1990-2020
100
Glossary
101
Table: Glossary Of Petrochemicals Terms
101
Methodology
102
Industry Forecast Methodology
102
Risk/Reward Ratings Methodology
104
Table: Petrochemicals Risk/Reward Rating Indicators
105
Table: Weighting Of Indicators
106

The Iran Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'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.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
  • Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
  • Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
  • Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).

BMI’s Petrochemicals Risk Reward Index

BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.

Industry Trends & Developments

Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Global & Regional Market Overview

Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.

Sub-sectors covered by the Petrochemicals Reports include:

Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene

Please note – not all country Reports cover all sub-sectors – see website for details.

Sources

The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc