The halt of Karoon Petrochemical, one of the largest producers of isocyanates in the country, could soon become a pressure point in the downstream supply chain of industries. These products, including TDI (toluene diisocyanate) and MDI (methylene diphenyl diisocyanate), are widely used in various industries such as furniture, foam, building insulation, sandwich panels, household appliances, and automotive parts. The halt or reduction of production at Karoon Petrochemical, as the main producer of these products, could limit their supply and significantly increase the costs of raw material procurement.
Consequences of the Halt of Karoon Petrochemical Production
Concerns in this regard intensify as Karoon Petrochemical has been targeted twice during recent attacks and is facing serious challenges. This situation not only pertains to the reconstruction of this petrochemical facility but also exacerbates the risk of a supply shock in the raw materials of several industries. Nevertheless, there are still no signs of a national and immediate plan to secure funding and expedite the reconstruction of Karoon Petrochemical.
Costs Arising from Raw Material Shortages
If the halt of Karoon Petrochemical production is prolonged, the question is not just "When will Karoon resume operations?" but the more critical question is who will bear the costs arising from the shortage of TDI and MDI and the increase in raw material prices in the coming months. This pressure will be directly transferred to downstream industries and could lead to price increases. Officials must act before the effects of this halt at the Karoon complex are transferred to the market and quickly implement necessary plans to prevent price increases.
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