Unfortunately at the present situation the economical recession and pressure is threatening many countries. For Iran the condition is worse due to different sanctions imposed over Iran. To assess what will be in the horizon of the Iranian plastics & rubber industries, the PIMI editorial team has analyzed the present situation.
Irrespective of other general factors, the spread of COVID-19 virus has resulted in declining in consumer products’ demands, also the prices rise for materials and products. The reason for the latter is that the controlling system of the Government for free market of materials is too weak or even negligible, due to the influence of material mobs. So, no matter if the PDID Office committee of price definitions reduces or increases the prices. They are the manipulators that dictate the material prices. So, as a total we can’t see a bright horizon for the converting industries.
The declining in plastics products’ demands is now definitely dependent to the priorities of the families who are under the poverty line. Before the pandemic, already we had 5/10 families who were living under the poverty line or were considered as the average classification. Now by imposition of the viral pandemic and increasing the rate of jobless people and those who have been fired out, the rate could increase to 7/10. During such crisis, it is the behaviour of these families that dictates consumer markets supply and demand. They prefer to spend whatever saving or income that they have for purchasing the essential goods that keep them alive: plastics and rubber, as a result, are out of their spending basket because they don’t have any prediction that when the crisis is over and when the normal life starts.
This conservative behaviour will affect the converting industry. As an example, if an average classified family had planed to change the PVC covering of its kitchen floor, now it prefers to shift its plan to after pandemic period. Such a look at the huge index will affect the PVC covering producers. Another example is declining in construction and maintenance plans, so those converting industries that produce construction goods are affected deeply.
Meanwhile, they are not direct producers of the consumer goods that are affected and suffer financial damages. Material sellers, additives producers, masterbatch manufacturers, machine manufacturers, maintenance work forces, mould makers and so on, are the others waiting at this ques. This continues with transportation and even media that should suffer damages somehow.
Of course, it is obvious that part of the plastics production chain like producers of packaging, film producers, non-woven material producers, factories that changed their lines to produce masks, disposables, filtration and protective clothing were among those that benefited from this situation. We may add the factories and companies that produce medical devices and hospital needs. But, even for this chain expecting huge benefits is only an apparent suggestion, because their main customer is Health Ministry which never pays in cash and also pays its own defined prices.
Now, it is the main factor that makes this situation worse than ever. It is the sanction, that prevents business between Iran and many other countries that are in need or shortage of many goods and products that Iran is able to produce it more than its domestic demand. If this was not the case, then were able to suggest a hopeful horizon for the Iranian plastics rubber companies, but as far as the sanctions continue the horizon for these industries is just dark.