Sanctions to hit Iran petchem, plastics growth - analyst
25 August 2010 17:16 [Source: ICIS news]
TORONTO (ICIS)--Sanctions on ?xml:namespace>Iran could cut operating rates in the country’s petrochemicals and plastics industry as well as hamper plans to expand polyethylene (PE) and polypropylene (PP) capacities, an analyst said on Wednesday.
Alembic Global Advisors, an independent New York-based equity research firm, said with western majors such as LyondellBasell exiting Iran, the country would be cut off from much-needed chemical technologies, as well as large amounts of catalysts, additives and specialty polymers not produced in the country.
That, in turn, would have a negative impact on Iranian petrochemical manufacturing and plant operating rates and expansions, particularly in PE and PP, Alembic said in a research note.
LyondellBasell said earlier on Wednesday that it would pull out of Iran, as well as Syria and Sudan, to avoid possible US trade violation penalties. The withdrawal primarily affected the licensing of technologies to produce plastics, the plastics manufacturer added.
According to Alembic, LyondellBasell’s main business in Iran involved PE and PP production technology.
“LyondellBasell pulling the plug on Iran would not only reduce operating rates at the current PE/PP facilities but may also impede the pace of new PE capacity build outs in the country,” Alembic said.
As for LyondellBasell, the withdrawal from Iran would only have a minimal impact on the company’s revenues, the analysts added.
Iran currently has a PE production capacity of 3.4m tonnes/year, or about 4% of global capacity, which was expected to grow to 4.9m tonnes/year by 2013, Alembic said. In PP, Iran currently has a production capacity of 1m tonne/year, or 2% of global capacity, which was expected to remain flat.
Earlier this year, US petrochemicals major Huntsman said it would end sales into Iran.
For more on LyondellBasell, Huntsman and other producers visit ICIS company intelligenceBy: Stefan Baumgarten+1 713 525 2653
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