Petrochemical Industry ‘Most Reliable’ Economic Sector

Tehran, Sep. 06 (SENA) – The petrochemical industry seems to be the “most reliable” economic sector in Iran due to the availability of raw material and feedstuff in the country as well as the fuel prices which are quite competitive, an expert said.

“Despite shocks in the petrochemical market, the industry has been in better conditions since the sanctions lifting, as prices of steel and raw material have fallen,” Mostafa Omid-Ghaemi, CEO of Mehr Ayandegan Financial Development Group, said in an interview.

Iran has a comparative advantage in production of petrochemical products, and the industry could give a major boost to the capital market in the coming years, he said.

Petrochemical companies significantly contribute to exports, as the majority of the products are exported. Of note, petrochemical exports are free of tax.

Omid-Ghaemi also touched upon the project funds – new instruments to be introduced to the Iranian market, predicting that the tool would positively affect the petrochemical market. However, he noted that the profit-making process could take a while.

Projects funds are aimed at helping provide financing for petrochemical companies in initial stages, when industrialists need a huge amount of capital to run their project.

The former head of the Iran Fara Bourse admitted that the weak oil prices have affected the industry productivity in the recent past, but he noted that demand for petrochemical products has been increasing, and therefore part of the loss has been compensated.

“Fortunately, the fall in prices of petrochemical products has not been as much as oil. On the other hand, the feedstuff prices have also fallen, and therefore industry has survived.”

However, he noted that the unification of foreign exchange rates could negatively impact the industry’s return rate.