Rapid recovery of Iran's chemical industry after Iran-Israel ceasefire, methanol production back to pre-conflict levels

According to market monitoring data, since the ceasefire agreement between Iran and Israel on June 24, Iranian chemical operators have quickly restored production load rates to pre-conflict levels. Earlier, due to the escalation of geopolitical conflicts, Iran was forced to suspend the operation of petrochemical, fertilizer and other industrial facilities.

Cease-fire agreement drives industrial recovery

after the ceasefire agreement came into effect, Iran's chemical trade flow to key markets such as China and India has gradually returned to normal, and the prices of related oil, gas and petrochemical products have also returned to normal levels. This recovery process has important implications for the global chemical supply chain.

Production disruption during conflict

although Israel did not directly hit Iranian chemical facilities during the conflict, the June 14-15 airstrikes on energy infrastructure caused a shortage of natural gas feedstock and security concerns, forcing Iran to significantly reduce chemical production. This supply disruption has had a significant impact on international markets.

Price Fluctuation and Recovery of Methanol Market

during the conflict, the interruption of Iranian methanol supply directly pushed up the international market price. According to Platts Energy Information data, the price of methanol in India has risen sharply: after breaking through US $300/ton on June 19, it reached a peak of US $305/ton on June 20.

With the ceasefire agreement reached, the market price quickly fell back. On June 27, methanol prices fell back to $264.5/ton, and market bearish sentiment was strengthened by expectations of supply recovery.

Recovery of main production facilities

according to a number of companies, the current operating load rate of Iran's main methanol production plants has returned to between 60% and 90%:

• carvey Methanol Company: 2.3 million t/a plant resumed to 80% load operation on June 25
• Zagros Petrochemical (ZPC) and Sabalan Petrochemical (SPC): Restart three 1.65 million-ton/year production units in late June
• regional facilities in Assaluyah: Marjan Petrochemical and Bushehr Petrochemical each have resumed production of 1.65 million tons/year units.

Overview of Chemical Industry Scale in Iran

according to data released by the Iranian government, Iran will export about 29.2 million tons of petrochemical products in 2024, generating about US $13 billion. Domestic production of 13.1 million tons, to achieve sales of about $11 billion.

In the field of methanol, Iran has a designed annual production capacity of 15.1 million tons in 2024 and exports about 10 million tons of methanol, accounting for 1/3 of its petrochemical exports. Iranian methanol is mainly produced by a number of world-class plants located at the Asaruyeh chemical and natural gas hub on the northern shore of the Persian Gulf.

Impact on global markets

the rapid recovery of Iran's chemical industry is positive for the stability of the global chemical supply chain, especially for major import markets such as China and India. With the gradual recovery of production capacity, it is expected that the prices of related chemicals will continue to stabilize.