Will demand be there when Iranian resin comes to market?

Despite fears of a polymer overdose on the way (Dec. 2005 MPW), Iranian producer National Petrochemical Co. (NPC, Tehran) is forging ahead on projects that are destined to make Iran the number two thermoplastics producer in the Middle East after Saudi Arabia.

Although some projects have been delayed to the middle of this year, NPC plans to have 770,000 tonnes/yr of capacity onstream including high-density polyethylene (HDPE); linear-low and low-density PE; polypropylene, vinyl, polystyrene, ABS, melamine, and epoxy.

In the background are projects waiting to be finished by 2008 that will bring total output, if timetables are maintained, to more than 7 million tonnes of thermoplastics/yr. During a visit last month MPW witnessed a beehive of activity at NPC''s PARS Special Economic/Energy Zone in Bushehr Province, which gets its raw materials, in this case, from gas fields in the Persian Gulf. One of the projects, a 50/50 joint venture with Sasol of South Africa, expects to be churning out 300,000 tonnes/yr high- and medium-density PE, and 300,000 tonnes/yr LDPE by later this year. The plastics related projects at this site are scheduled to startup at the end of this year through 2008. NPC is still looking for partners to help finance some of these projects.

With all this capacity coming into place, even if some is delayed, the question still remains where will it go? NPC officials are confident that Asian markets will continue their appetite for plastics sourced in the Middle East and that because the natural resources are more plentiful and cheaper in Iran, the production costs are calculated to be substantially lower than their counterparts in Asia or Europe.

Still, NPC says it doesn''t want to rock the boat. "We''re not interested in disturbing the market (by undercutting polymer prices)," say M. A. Zardbani, foreign commercial director of NPC''s marketing arm, Iran Petrochemical Commercial Co. (IPCC). NPC has decided to market the output by itself in Asia, Africa, and Europe. The U.S. government forbids NPC imports into the U.S.-Robert Colvin; [email protected]