Polymer Products Constitute 2.2% of Non-Oil Exports

EghtesadOnline: The polymer industry accounts for 2.2% of Iran’s non-oil exports, while the installed capacity for polymer products is more than 20 million tons, of which only 5 million tons are produced per year and half of which is exported, the chairman of the board of Iran National Plastic and Polymer Industries Association said.

News ID: ۷۸۶۶۱۷

06 July 2021

“The polymer industry accounts for 1.5% of GDP and 3.6% of employment in the country,” ISNA also quoted Saeed Torkaman as saying.

“In 2020, we had a decline in polymer exports, which reached about $2.5 billion, while exports of complementary petrochemical industries were about $2.7 billion,” he added.

Torkaman noted that complementary industries can be an attractive market for the petrochemical industry, as they can also help generate revenues for the country.

“Cost is the major obstacle for the export of polymer products. Domestic manufacturers supply their raw materials at high prices, which deprive them of a competitive advantage for final prices in export markets,” he said.

“The lowest prices in the world are found in Southeast Asia and the highest exports of raw materials also happen in that region. Competitors in China get raw materials at lower prices and take the competitive power from Iranian producers.”

Iran ranks first in the export of polymer products to Armenia, second to the Republic of Azerbaijan and sixth to Pakistan.

Iran currently exports plastic and polymer products to the Middle East and Asia-Pacific region, and is planning to enter African markets. The Oil Ministry said it has a roadmap for getting a bigger share of the international polymer and plastic market.

Progressive Trend

Given the comparative advantage of the energy sector, polymer and plastic industries have seen a progressive trend in the past two decades.

Due to the growing need for an efficient economy, heavy materials, such as glass and metals, are being replaced by lighter variants, including polycarbonate (PC), in the auto industry. As a result, the global polymer market is expected to increase from $533 billion in 2019 to $838 billion by 2030.

This is because PC and other polymers have excellent electrical, mechanical, insulating, optical and chemical properties, as well as a high strength-to-weight ratio and elasticity and corrosion resistance.

Currently, almost 30% of all automotive components are being made from polymers. And with the rising demand for electric vehicles, the polymer market is expected to grow further, as these materials are used to make lightweight battery packs.

As a result of the growing concerns regarding air pollution, the need for lightweight vehicles, preferably electric variants, is driving the demand for polymers.

During the Covid-19 crisis, automotive plants across the world were shut down, in compliance with government mandates. This drastically reduced demand for various raw materials.

However, demand for polymers and plastics in food processing, packaging, pharmaceutical and personal care sectors is still strong.