Kermanshah Petrochemical Report: Rising feed prices are a warning sign for Iran’s urea industry

According to Energy Press, citing the Public Relations Department of Kermanshah Petrochemical Industries Company; Kermanshah Petrochemical, as one of the oldest and most important urea producers in the country, annually supplies nearly one million tons of high-quality products to the domestic and export markets. The company, which has been able to maintain production stability in recent years by successfully overcoming difficult conditions such as international sanctions, currency fluctuations, and winter gas crises, is now facing a reality that is not merely technical or operational in nature; rather, it is directly tied to the company’s financial foundations.
Apart from the immediate effects on cost, the reduction in profit margins due to increased feedstock quickly shows itself in balance sheets. What appears to be a price change on the surface can turn profitable companies into low-profit or even loss-making units within a few fiscal quarters. This trend not only affects shareholders’ profits and the ability to repay financial obligations, but also creates uncertainty and delays in investment in development projects such as the second phase of urea and ammonia.
This situation becomes more complicated when we add to it the energy imbalance crisis and frequent gas outages during the cold season. Any production stoppage means the loss of part of the export market and reduced bargaining power in international contracts — an opportunity that competitors quickly seize and that will be very costly and time-consuming to regain.