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Although analyses predict that the Iranian economy will grow in 2014, its petrochemical industry will still have to cope with overcapacity. As international sanctions remain and Iran's biggest international market, China, is seeing a drop in demand, Iranian petrochemical companies are facing contraction.

The current situation puts at risk the ambitious development program of the Iranian government that aims to reach total petrochemical capacity of 100 million tpa over the next five years, according to a report released by BMI Research. Over the first half of the current Iranian calendar year Iran's exports reached $4.84 billion, falling short of the target of $13 billion for the whole year. The government had hoped to export 17.4 million tons of petrochemical products over the present calendar year, but it looks as though this will not be possible, the report commented.

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Over the next few years Iranian ethylene capacity is expected to reach 11.08 million tpa, as the two olefins 11 and 12 projects are predicted to launch, with a capacity of 2 million tpa and 1.2 million tpa respectively.

Between 2013 and 2018 Iran is set to launch new capacities in several major petrochemical segments, including an extra 1.8 million tpa of PE capacity, 500 000 tpa of other polymers capacity, 5.84 million tpa of methanol, 1.68 million tpa of ammonia and 5.16 million tpa of urea, the BMI report stated.