Latest crude supply news Central Europe

Czech imports of Russian crude amounted to 2.336 million tons in the first half of 2023 against 1.765 million tons in the same period in 2022. 

Due to the price cap imposed by the EU the costs of Russian crude amounted to €360.5 per ton against €617.0 per ton for crude supplied by Azerbaijan and €605.2 for crude supplied by Kazakhstan.  Unipetrol is required by EU sanction law to stop buying Russian oil from December 2024. 

The Czech Republic consumes around 8.0 million tpa of which around two thirds currently is sourced from Russia.  In future larger volumes will be steadily ensured by the TAL crude oil pipeline leading from Trieste.  The second half of 2024 will be particularly difficult, when the capacity of the TAL pipeline will be temporarily limited due to modifications and expansion to 4.0 million tpa. 

MOL has already started transporting crude oil from its oil field in Azerbaijan to Slovnaft in Bratislava via the Adria oil pipeline.  The Adria is seen the key alternative to the Druzhba for Hungary and Slovakia.  MOL is taking actions to manage the risk of possible crude oil supply disruption, including consideration of using alternative supply routes of sufficient capacity. MOL Group has access to state reserves which enables it to supply its markets in case of interruptions of the Druzhba pipeline.

Current problems for Slovnaft relate to quality of the oil coming from non-Russian sources.  The company was forced to reduce the quantities of alternative oil in July, supplied through the Adria pipeline as problems had emerged with substances and impurities.  Currently, the refinery processes about 30% of alternative non-Russian crude oil, which amounts to the current technical limit. For a larger share of processing, Slovnaft will need to make further technological adjustments. These should be completed next year during planned shutdowns. 

Hungary’s average price for crude imports in January to May amounted to €390 per ton, mainly helped by the price cap on Russian crude.  Purchases of crude from Russia in January to May amounted to 1.629 million tons from the total of 2.640 million tons, thus accounting for 62% of supply.  The Russian average price of €336.476 per ton compared against the next lowest price of €439.009 per ton from Iraq, although volumes from Iraq were small.  Volumes from Kazakhstan, delivered by the Druzhba, amounted to 450,673 tons in the first five months at an average price of €557.969 per ton. 

Polish imports of crude oil Jan-Jun 2023

Poland imported 13.182 million tons in the first six months in 2023 at an average price of €537.3 per ton.  Saudi Arabia supplied 6.421 million tons at an average price of €562.1 per ton followed by Norway which supplied 3.311 million tons at an average price of €553.2 per ton.  Other sources included Nigeria, the US and the UK, whilst imports from Russia were stopped in late February.

Poland-petrochemical production Jan-Jun 2023

PKN Orlen reduced ethylene production in the first six months in 2023 to 181,800 tons from 243,500 tons in the same period in 2022.  Propylene production at Plock dropped from 235,200 tons to 157,600 tons.  Production of propylene is expected to increase in Poland this year, particularly in the fourth quarter, if the new Polimery Police plant starts without difficulties. Butadiene production at Plock dropped from 34,800 tons versus 31,200 tons in January to June 2023.

MOL Jan-Jun 2023

MOL’s ethylene production in Hungary and Slovakia totalled 338,000 tons in the first half of 2023 against 323,000 tons in the same period in 2022, whilst propylene rose from 166,000 tons to 179,000 tons.  Butadiene production increased from 37,000 tons to 39,000 tons.   

MOL’s downstream EBITDA resulted in $102 million in Q2 2023 due to the regulatory impact, margin pressure in petrochemicals and less favourable macro in refining. 

Overall, for the first six months this year the MOL Group achieved $1.125 billion in EBITDA, whilst the second quarter alone the EBITDA amounted to $411 million.  Both downstream and upstream results were hit by worsening macro conditions and upheld massive government levies, including extra taxes and extra mining royalty fees. Moreover, 2nd quarter results were also distorted by a new revenue-based extra tax in Hungary amounting to $315 million for full-year 2023, recognised fully as a one-time expense in Q2.

MOL Group's most significant commitments in Hungary relate to a polyol project of MOL Petrochemicals (€105.8 million), which aims to become a major producer of polyether polyols.  Another €106.9 million is being invested in the construction of the metathesis project, which is a greenfield investment providing propylene for the polyol complex.  For the expansion of the maleic anhydride plant at the Danube refinery, which is located at Szazhalombatta, €30.7 million has been allocated. 

Other projects being undertaken by MOL in Hungary include a revamp of the PP3 unit and modernisation of the ethylene.  In Croatia the Rijeka refinery, belonging to MOL subsidiary INA is undergoing an upgrade project.

Polish propylene imports Jan-Jun 2023

Imports of propylene into Poland dropped in the first six months in 2023 to 69,834 tons against 73,797 tons in the same period in 2022. 

Average prices dropped from €1309.8 per ton in January to June 2022 to €953.1 per tons in the first six months in 2023.   Import volumes are not expected to be significantly affected by the start of the 437,000 tpa plant by Grupa Azoty Polyolefins.  Most of the propylene from the PDH plant is intended to be used in the production of PP.  Any surplus is expected to be transferred to Azoty’s subsidiary ZAK at Kedzierzyn-Kozle for the production of oxo alcohols.  

Although polypropylene trade with Russia has been sanctioned by the EU, propylene monomer has not been included thus far.  Even so due to problems with logistics Russia stopped exporting to Poland in the latter part of 2022.  To compensate for the drop in imports from Russia and Ukraine (where production was suspended at Karpatneftekhim following the Russian invasion), Poland started to receive deliveries from other regional countries in East Europe.  Germany supplied 34,540 tons in the first six months followed by the Netherlands with 11,917 tons and Bulgaria with 9,138 tons.  Propylene from Bulgaria came from the Bourgas refinery.

Polish butadiene imports Jan-Jun 2023

Poland imported 40,484 tons of butadiene monomer in the first six months in 2023, versus 40,443 tons in the same period in 2022.  Imports from Hungary increased from 12,316 tons last year to 13,861 tons in January to June 2023, whilst shipments from Austria increased from 18,227 tons to 18,363 tons.  Average prices dropped from €1141.5 per ton in January to June last year to €901.3 per ton.  

Hungarian propylene & butadiene imports Jan-May 2023

Hungarian propylene exports amounted to 38,988 tons in the first five months this year, most of which went to Slovakia at a price of €1139.7 per ton.  MOL currently produces a surplus of propylene and is also building a new plant of 100,000 tpa which is intended to cover the new propylene oxide plant.  Propylene production by Slovnaft is not sufficient to maintain high utilisation rates for polypropylene and additional supplies need to be purchased.  Slovnaft in Slovakia is currently upgrading its steam cracker unit which should increase the capacity for propylene production. 

Hungarian butadiene exports dropped slightly in the first five months to 26,775 tons versus 21,381 tons in the same period in 2022.  Despite a weak market Hungarian exports rose from €1025.7 per ton in the first five months last year to €1099.2 per ton.  

MOL produced 21,000 tons of butadiene in the first five months, of which around 75% is exported.  The remainder consumed in a small plant at Tiszaujvaros for synthetic rubber production.     

Czech monomer trade, Jan-Jun 2023

Propylene imports into the Czech Republic increased from 22,080 tons in January to June 2022 to 22,197 tons in the same period in 2023.  Germany supplied 16,459 tons in the first six months, up from 12,089 tons.  Other suppliers included Bulgaria from which the Czech Republic purchased 3,742 tons and Romania where volumes amounted to 1,048 tons.  Average prices for Czech propylene imports dropped from €1373.0 per ton in the first six months in 2022 to €1022.6 per ton in 2023.   Ethylene exports from the Czech Republic amounted to 6,156 tons in the first six months in 2023 against 7,157 tons in the same period last year, whilst ethylene imports rose from 11,712 tons to 22,485 tons.

Germany supplied 22,334 tons of ethylene to Czech Republic in the first six months in 2023 at a cost of €21.033 million.  This compares against 23,062 tons for the whole of 2022.

Czech imports of butadiene in the first six months this year increased from 35,526 tons to 48,036 tons, supplementing butadiene production at Kralupy.  Germany supplied 35,943 tons for €31.826 million, followed by Hungary which supplied 11,857 tons for €10.372 million.

Central European styrene trade Jan-Jun 2023

Poland imported 43,080 tons of styrene in the first six months in 2023 versus 44,643 tons in the same period in 2022.  Prices for styrene monomer and ethylbenzene both tended to drop in the first half of 2023 in line with lower energy and feedstock costs.  The Netherlands reduced shipments to Poland from 30,205 tons to 22,500 tons whilst imports from Germany rose from 6,015 tons to 8,532 tons.  Cost prices averaged €1141.4 per ton in January to June 2023 against €1593.6 per ton in the same period in 2022.

The decline in styrene prices reflects the same trend in import prices for the mainstream chemical raw materials into Poland in the first half in 2023.   

Styrene imports into the Czech Republic amounted to 22,096 tons in the first six months in 2023, rising from 10,381 tons in January to June 2022.  Costs averaged €1056.3 per ton in January to June 2023 against €1677.7 per ton in the same period in 2022. 

Hungarian styrene imports amounted to 32,589 tons in the first five months in 2023 against 44,270 tons in the same period in 2022, with average prices dropping from €1528.5 per ton to €1306.1 per ton in 2022.  Italy supplied 41,361 tons in January to May 2022 which fell to 29,986 tons in the same period this year.  Styrene in Hungary is used for the production of polystyrene by Versalis at the Szazhalombatta plant. 

NIS expanding in petrochemicals

NIS took over HIP Petrohemija at the end of 2022 with the obligation to construct a new polypropylene plant at Pancevo with a capacity of at least 140,000 tpa.  This project is current being worked out in addition to other aspects of investment relating to olefin production at Pancevo.  Naphtha is directed from NIS to pyrolysis within HIP Petrochemicals in order to obtain as much high-concentration ethylene as possible. 

Having taken over Petrohemija NIS is seeking to diversify and to expand its business in petrochemical products after the modernisation of existing facilities and building new production capacity.   For the petrochemical sector the company is helped by the absence of any competition within 200 km from Pancevo.  The drawback for NIS is the majority ownership held by Gazprom Neft and the political implications

Central European polyethylene market first half of 2023

Polyethylene margins in Europe declined to €320 per ton in the first half of 2023, whilst polypropylene margins dropped to €372 per ton.  Most producers reported lower polyolefin sales in the first six months due to recessionary trends affecting most of Europe.  For the third quarter demand for LDPE and HDPE is stable in Central Europe but showing only slight signs of growth in certain applications.  Prices have been on a falling trajectory this year.  The most active buyers have been producers of films for the food and construction industries.

MOL’s combined polyethylene production in Hungary and Slovakia totalled 263,000 tons in the first half of 2023 against 238,000 tons in the same period in 2022, whilst polypropylene rose from 237,000 tons to 247,000 tons.  HDPE production only takes place for the MOL Group at Tiszaujvaros, where production increased from 125,000 tons in the first half of 2022 to 152,000 tons in 2023.

Poland-polyethylene market first half of 2023

Polyolefin trade into and out of Poland experienced declines in the first six months in 2023, with nearly all grades of polyethylene and polypropylene affected.  Based on production and trade, polyethylene consumption amounted to 594,300 tons in the first six months in 2023 against 685,900 tons in January to June 2022.  Poland’s consumption of polyethylene amounted to 1.291 million tons in 2022 versus 1.350 million tons in 2021.

Polish polyethylene production & trade Jan-Jun 2023

PKN Orlen and Basell Orlen Polyolefins (BOP) produced a combined total of 153,300 tons of polyethylene at Plock in the first six months in 2023 against 167,300 tons in the same period last year. 

Polyethylene imports into Poland totalled 585,621 tons in January to June 2023 versus 698,089 tons in the same period in 2022, with average prices dropping from €1863.7 per ton to €1453.2 per ton this year. 

HDPE imports into Poland dropped from 238,013 tons to 202,180 tons in January to June 2023 whilst LDPE imports dropped from 185,454 tons to 158,692 tons.  LLDPE imports declined from 131,060 tons to 101,292 tons.  Most of the LLDPE imports were sourced mostly from West Europe, including France, the Netherlands and Germany. 

Polyethylene exports from Poland have also dropped this year.  Exports decreased from 179,525 tons in the first six months in 2022 to 144,633 tons in the same period in 2022, with average prices dropping from €1696.1 to €1424.1.  HDPE was Poland’s largest export grade amounting to 101,244 tons in the first six months against 123,416 tons in January to June 2022. 

HIP-Petrohemija polymer exports Jan-May 2023

HIP-Petrohemija exported 42,734 tons of polyethylene in the first five months in 2023 against 50,200 tons in the same period in 2022.   From 9 June is year NIS increased its stake in Petrohemija to 90%, while the state of Serbia retains a stake of 10%.  NIS is planning the construction of a polypropylene production plant at Petrohemija with a capacity of at least 140,000 tpa, to be constructed within a period of six years.

Rompetrol Rafinare-polyolefin production and sales Jan-Jun 2023

Rompetrol Rafinare is the sole producer of polypropylene and polyethylene (LDPE, HDPE) in Romania. Besides its own products, the company is now actively selling a wide range of petrochemical products which are not currently produced by the Rompetrol Rafinare such as LLDPE, PVC, PET and PP.  

The most important distribution channels for polymers comprise the Romanian domestic market with 50%, and for export markets Bulgaria 19%, Italy 6% and Serbia 5%. The external sales of polymers were targeted to both the European Union and third countries. The distribution of petrochemical products sold by Rompetrol Rafinare was done by means of auto and railway in the case of sales on the domestic market and, in the case of sales on the foreign market, the distribution of these products was made both by means of automotive and maritime transport through the ports of Agigea and Constanta.

Polish polypropylene production & trade Jan-Jun 2023

Polypropylene production at Plock dropped from 182,200 tons in January to June 2022 to 139,400 tons in the first six months this year.  Overall consumption of polypropylene in Poland amounted to 443,700 tons in the first six months against 556,500 tons in the same period in 2022.

Imports of polypropylene into Poland dropped from 508,434 tons in the first six months in 2022 versus 418,361 tons in the same period in 2023, with average prices dropping from €1873.8 to €1538.2 per ton.  Homo grade imports dropped from 334,578 tons in the first six months last year to 265,144 tons. 

Copolymer imports into Poland fell from 161,572 tons in the first six months in 2022 to 142,397 tons in the same period this year, with costs dropping to €234.106 million against €323.777 million in the same period in 2022. 

Germany was the largest supplier of propylene copolymers to the Polish market in 2022 transporting 82,907 tons for €156.748 million.  In the first six months in 2023 Germany supplied 42,897 tons of copolymers to the Polish market for €71.091 million.  Imports are expected to fall as the new Polimery Police plant starts to take effect in the domestic market.

Supply sources this year have changed as Russian imports have disappeared from the market.  Shipments from Russia accounted for 21% of total Polish imports in 2021 but dropped to 8.5% in 2022.  Russia provided 51,179 tons of homo grade to Poland in 2022 for €75.955 million, but there has been no trade this year or expected in the foreseeable future. 

Polish exports of polypropylene dropped from 134,136 tons in the first six months in 2022 to 114,072 tons in the same period in 2023.  Average prices for exports amounted to €1488.5 per ton in the first six months which was down from €2107.9 per ton last year.  

The largest destination for Polish homo grade polypropylene in the first half of 2023 was Germany which took 18,566 tons for €25.435 million followed by the Czech Republic with 13,599 tons for €17.850 million.  Other important markets in Europe included Italy, taking 7,260 tons in the first half in 2023 for €10.380 million followed by Slovakia with 6,637 tons for €9.786 million.  

Polish polypropylene trade is expected to undergo some major changes in the next few months when the new Polimery Police plant starts to operate on a commercial basis.  The plant is currently going through its start-up procedure.

Czech polyethylene trade Jan-Jun 2023

Czech exports of polyethylene amounted to 194,117 tons in the first six months in 2023 from 210,313 tons in the corresponding period in 2022, with average prices falling from €1735.5 per ton to €1413.8.  HDPE represents the largest category of Czech polyethylene falling from 183,807 tons to 172,523 tons.  Lacklustre demand has been one of the main drivers of lower polyethylene prices this year.

Imports of polyethylene into the Czech Republic dropped from 166,534 tons in the first six months in 2022 to 148,502 tons in 2023.  Average prices dropped from €1947.0 per ton to €1717.1 per ton.  HDPE imports dropped from 64,355 tons to 58,078 tons, whilst LDPE imports decreased from 63,022 tons to 52,015 tons. 

Polypropylene exports from Orlen Unipetrol dropped in the first six months from 124,343 tons in 2022 to 112,484 tons in 2023.  Prices dropped on average from €1787.3 per ton to €1530.7. The largest market for Czech polypropylene exports in the first six months in 2023 was Poland followed by Germany.   

Polypropylene imports into the Czech Republic amounted to 271,684 tons in the first six months this year against 268,470 tons in the same period in 2023, with average prices falling from €1944.3 per ton to €1651.2 per ton.  Copolymer imports increased from 100,436 tons to 109,625 tons whilst homo polymer imports dropped from 159,182 tons to 154,634 tons.  Total costs for polypropylene imports totalled €285.491 in January to June 2023 against €338.539 million in the same period in 2022.

Copolymer imports were sourced mostly from Europe, with Germany supplying 30,233 tons in the first six months for €57.723 million.  The largest non-European supplier was South Korea from where the Czech Republic imported 16,748 tons in January to June this year for €24.680 million. 

Hungarian polyethylene trade Jan to May 2023

Hungarian imports of polyethylene dropped from 92,732 tons in January to May 2022 to 86,207 tons in the same period this year.  LDPE imports dropped from 25,283 tons to 19,514 tons whilst HDPE dropped from 42,091 tons to 35,588 tons in January to May this year.

 Import costs dropped from €177.122 million for polyethylene in January to May 2022 to €145.026 million in the first five months this year, with average prices dropping from €1910.0 per ton to €1682.3 per ton.  Hungarian export prices dropped from €1631.6 per ton in January to May 2022 to €1330.7 per ton in 2023. 

Export volumes of polyethylene from Hungary amounted to 145,592 tons in the first five months this year versus 152,063 tons in January to May 2022. 

HDPE exports dropped from 99,891 tons to 96,021 tons and LDPE increased from 36,739 tons to 40,950 tons.  The rise in polyethylene exports this year has taken place despite the slight decline in production by MOL at Tiszaujvaros.

 Hungarian polypropylene trade Jan-May 2023

Propylene copolymer imports into Hungary amounted to 22,375 tons in January to May this year versus 28,216 tons in the same period in 2022, whilst polypropylene homo grade inward shipments decreased from 50,652 tons to 49,160 tons.  Overall imports of polypropylene dropped from 91,536 tons in the first five months last year to 82,695 tons. 

 Due to softening prices import costs dropped from €170.172 million to €133.635 million in January to May 2022.  Hungarian polypropylene exports in the first five months amounted to 102,745 tons against 105,792 tons in the same period in 2022.  Export revenues amounted to €144.670 million against €186.774 million last year.  

 By volume Hungarian homo grade polypropylene exports rose to 56,045 tons from 50,866 tons.  Copolymer exports dropped from 29,141 tons to 24,222 tons.  Overall average prices dropped from €1765.5 per ton to €1408.In terms of consumption Hungarian trends in polyolefins reflect the broader European picture of recessionary factors.  Polypropylene consumption did not recover in the first two quarters and demand remains weak.

Hungarian synthetic rubber trade Jan to May 2023

Hungarian imports of synthetic rubber amounted to 60,502 tons in the first five months this year for total costs of €137.057 million, against 57,876 tons in January to May 2022 for total costs of €126.707 million.  Average costs per ton rose over the five-month period to €2411.2 against €2189.3 per ton last year.  Russia continues to supply the Hungarian market with butadiene rubber and halogenated butyl rubber, although volumes are significantly down on pre-war trade. 

Halogenated butyl rubber (HBR) exports from Hungary totalled 3,462 tons for €10.481 million, whilst imports totalled 3,507 tons for revenues of €8.633 million.  Exports of HBR largely balance out imports, reflecting the lack of consumption in Hungary. 

Import sources of HBRs were dominated by Russia which supplied 2,318 tons in the first five months.  Although the sanctions on Russian HBRs to the EU were imposed in July last year the rules were amended in February 2023 when earlier sanctions on synthetic rubber were extended to June 2024.     

Hungarian butadiene rubber imports Jan-May 2023

Hungary imported 22,966 tons of butadiene rubber in January to May this year against 18,506 tons in January to May 2022.  The main change to market sources in recent months has come from Indonesia from where Hungary imported 9,199 tons in the first five months. 

Imports of butadiene rubber from Russia amounted to 1,935 tons in January to May this year versus 6,902 tons in the same period in 2022.  EU sanctions on butadiene rubber trade with Russia, introduced in July last year, have since been loosened under the pressure of European tyre manufacturers but this has not led to much of a revival of purchases from Russia.

Synthos production at Oswiecim Jan-Jun 2023

Synthos reduced the production of synthetic rubber in Poland from 143,200 tons in the first six months to 96,800 tons in the same period in 2023, the drop attributed to lower demand. 

In the styrene division Synthos reduced general purpose polystyrene production from 37,400 tons to 36,500 tons and EPS from 51,600 tons to 47,300 tons. 

Domestic market sales of rubber in Poland dropped in the first half of 2023, mainly from lower consumption in the tyre sector.  Total consumption of synthetic and natural rubber used in the tyre industry dropped from 287,800 tons in the first half months in 2022 to 255,600 tons in the same period this year. 

Synthos announced in March 2023 that it intended to close the Kralupy plant by the end of the second quarter.  ESBR production is continuing at the Oswiecim plant in Poland.  Even in the first half of 2022, the Kralupy unit was still running at full speed and making money.  However, due to several times higher gas costs, Synthos was no longer able to compete on non-European markets.  More than half of the production was sold in the US and Asia where competitive prices made it very difficult to sell at profitable levels. 

A primary focus of Synthos in Poland includes the development of green energies not only for the company’s own usage but also wider applications in the Polish economy and abroad.  Orlen Synthos Green Energy has recently submitted two more applications regarding small modular nuclear reactors in Poland at Wloclawek and Ostroleka. 

Polish synthetic rubber trade, Jan-Jun 2023

Average prices for synthetic rubber imports into Poland dropped in the first six months to €2175.5 per ton against €2465.5 per ton.  Imports of synthetic rubber into Poland amounted to 133,370 tons in January to June 2023 against 151,324 tons in the same period in 2022. 

Butadiene rubber imports rose from 28,7063 tons to 29,791 tons and EPDM imports dropped from 24,766 tons to 22,018 tons.  Synthetic rubber exports from Poland totalled 132,287 tons in the period January to June 2023 versus 159,197 tons in the same period last year.  SBR formed the largest share of exports. 

Czech synthetic rubber market Jan-Jun 2023

Prices for synthetic rubber exports and imports of both synthetic and natural rubber have stabilised since the start of 2023.  Prices for Czech exports of synthetic rubber tend to be lower than import prices due to different product grades, with export prices in April consolidating at €1858 per ton and import prices at €2239 per ton.  Natural rubber prices tend to range at the lower end of synthetic rubber prices but are influenced by different market dynamics. 

Exports of synthetic rubber into Czech Republic amounted to 82,077 tons in the period January to June 2023 against 67,559 tons in the same period last year.  Imports of synthetic rubber amounted to 62,876 tons in the first six months in 2023 against 80,579 tons in January to June 2022, with natural rubber imports declining from 42,198 tons to 39,620 tons.   

Imports of synthetic rubber from Russia into the Czech Republic dropped from 15,325 tons in the first six months in 2022 (for €29.826 million) to 3,687 tons (for €6.448 million).  

The largest category of imports from Russia this year was for SBR grades where volumes amounted to 1,856 tons.  Butadiene rubber imports from Russia amounted to 1,474 tons against 6,418 tons in the same period in 2022, whilst imports of halogenated butyl rubber fell to 143 tons from 3,093 tons in January to June 2022. 

Czech exports of ESBR dropped in the first six months this year to 17,845 tons against 40,224 tons in the same period in 2022.  The plant was closed in April and will not produce in future.  Prices per ton for ESBR dropped slightly from €1905.9 to €1726.3 but according to Synthos production costs have risen to levels where the Kralupy plant is not able to be profitable.  

Czech butadiene rubber trade Jan-Jun 2023

Czech exports of butadiene rubber comprised 54,263 tons in the first six months in 2023 against 56,897 tons in the same period in 2022.  Revenues from butadiene exports dropped from €115.784 million to €99.301 million.  Imports of butadiene rubber amounted to 13,069 tons in the first six months which was down from 14,769 tons in the same period in 2022. 

The largest customer for Czech butadiene rubber is India which took 6,938 tons in the first six months in 2023 against 11,419 tons last year.  South Korea purchased 4,686 tons in the first six months, rising from 3,066 tons.  The largest European consumer this year for butadiene rubber produced by Synthos at Kralupy was Poland taking 7,522 tons followed by Slovakia with 5,854 tons.

Polish aromatics trade Jan-Jun 2023

Phenol imports into Poland amounted to 37,774 tons in the first six months in 2023 against 48,648 tons in the same period last year.  Supplies from Russia, which had previously been a major supplier to the Polish market, stopped in August last year following sanctions imposed by the EU.   Germany was the largest supplier of phenol to Poland in the first six months, shipping 28,100 tons.  Other suppliers included Finland which delivered 6,300 tons in the first half this year for €8.4 million and Spain which supplied 2,600 tons for €2.7 million. 

In other aromatic product areas, styrene imports into Poland amounted to 35,319 tons in the period January to June 2023 versus 44,782 tons in the same period in 2022 whilst ethylbenzene imports rose from 48,979 tons to 60,392 tons.  Nearly all of the ethylbenzene imports come from the Synthos plant at Kralupy Czech Republic, which are delivered to the Oswiecim plant. 

Poland exported 72,922 tons of benzene in the first six months which was down from 92,303 tons last year.  Average prices dropped from €1094.5 per ton to €869.8.  Germany was the largest destination for Polish benzene exports, taking 56,151 tons against 56,146 tons in the same period in 2022.  Exports of benzene from Poland to the Czech Republic dropped from 27,734 tons in January to June last year to 9,885 tons.

Paraxylene imports into Poland were not required by Poland in the first six months against imports of 22,474 tons in the same period in 2022. 

Polish PTA sales  and production Jan-Jun 2023

Lower PTA production at Wloclawek this year impacted on exports shipments from Poland, falling from 183,312 tons in the first six months in 2022 to 113,252 tons. 

Germany reduced inward shipments of PTA from Wloclawek from 184,469 tons to 90,485 tons, whilst shipments to Lithuania fell from 23,561 tons to 1,618 tons.  PTA prices dropped this year to €864.4 per ton in the first six months against €942.2 per ton last year. 

Central European caprolactam production and trade

Caprolactam production in Poland dropped from 81,500 tons in the first half of 2022 to 45,600 tons this year.  Production has been in decline since the middle of 2022, with frequent stoppages undertaken.  Azoty hopes for better economic conditions for caprolactam production before the end of 2023.  The group operates two plants at Tarnow and Pulawy, the latter which is part of an Orlen enquiry to purchase from Azoty in order to raise cash.

Caprolactam exports from the Czech Republic fell in the first six months to 11,006 tons against 22,442 tons in the same period in 2022.  Average prices dropped from €2495.4 per ton to €1821.6 per ton. 

Polyamide imports into the Czech Republic fell from 48,303 tons in the first half of 2022, for €196.291 million, to 46,526 tons for €204.468 million.  Despite weaker consumption in Europe polyamide prices have been slightly higher this year than in 2022 due to supply/demand factors. 

The European market has exhibited weak demand for both caprolactam and PA6, and despite lower energy costs it has been difficult for Azoty to produce at full capacity.  The average European contract price of liquid caprolactam fell by 10% and 15% quarter on quarter, while the average quarterly contract price of caprolactam on the broad Asian market went down 20% and 3% quarter on quarter.  Imports of cheaper PA6 chain products, especially from Asia, further eroded demand for PA6 and caprolactam.

Czech aromatic trade Jan-Jun 2023

Czech exports of ethylbenzene amounted to 60,662 tons in the first six months versus 51,475 tons in the same period in 2022, whilst styrene exports jumped from zero to 5,050 tons.  Styrene imports are still required in the Czech Republic, rising from 10,390 tons to 21,737 tons. 

Benzene exports in the first six months in 2023 amounted to 9,181 tons against 24,427 tons in January to June 2022, whilst imports of benzene dropped to 18,336 tons from 42,398 tons. 

Unipetrol operates a benzene plant at Litvinov with a capacity of 250,000 tpa, whilst benzene is also produced in the Czech Republic by Deza at Valasske Mezirici.  Deza also owns Petrochemia at Blachownia at Kedzierzyn Kozle and possesses a combined capacity of 160,000 tpa for benzene and 25,000 tpa for toluene.  Exports of toluene from the Czech Republic amounted to 6,442 tons in the first six months this year.  Czech imports of Bisphenol A amounted to 15,039 tons in the first half of 2023 against 17,475 tons in the same period in 2022, with average prices dropping from €2308.8 per ton to €1458.2.  The leading supplier was South Korea which shipped 6,262 tons in the first six months this year.

Polish organic chemical trade Jan-Jun 2023

Values and volumes for Polish trade in organic chemicals fell for both exports and imports in the first six months, as recessionary trends took effect.  

Import costs for organic chemicals into Poland dropped from €2.662 billion in the first six months in 2022 to €2.061 billion in the same period in 2022, whilst export revenues dropped from €1.239 billion to €783 million.  Volumes for exports dropped from 896,000 tons to 625,000 tons whilst imports fell from 1.587 million tons to 1.339 million tons. 

Ethylene glycol was one of the few products showing an increase in imports, rising in the first six months from 20,396 tons in the first six months last year to 50,843 tons in the same period in 2023. 

Belgium was the main supplier, providing 28,846 tons for €18.416 million.  Poland exported 6,138 tons of ethylene glycol in the first six months this year.  Diethylene glycol imports amounted to 10,169 tons in the first six months versus 10,227 tons. 

Methanol imports into Poland dropped from 468,512 tons in the first six months in 2022 to 350,502 tons in the same period in 2023, with volumes from Russia constrained by sanctions.   No further methanol imports from Russia are now legally possible into Poland, with the full sanctions taking effect from 18 June.   The impact is probably one of higher costs on consumers, but markets are being controlled by the war in Ukraine.

Polish acetic acid imports, Jan-Jun 2023

Acetic acid imports into Poland dropped from 18,421 tons to 26,278 tons in January to June 2023.  The main suppliers to the Polish market this year include the UK, which delivered 3,588 tons versus 7,492 tons in January to June 2022, and the US which increased shipments from 6,634 tons to 9,430 tons.  Average prices for acetic acid dropped from €1181 per ton to €781.1 per ton this year.

Hungarian organic chemical trade Jan-May 2023

Acrylonitrile imports into Hungary amounted to 10,214 tons in January to May this year versus 16,636 tons in the same period in 2022.  Average prices dropped from €2363.6 per ton against €2052.8 per ton in the first quarter in 2023.   

The largest supplier of acrylonitrile to Hungary in 2022 was the Netherlands, accounting for 22,953 tons for €55.452 million.    The Netherlands reduced shipments in the first five months to 4,916 tons from 9,697 tons.   

Maleic anhydride exports from Hungary amounted to 8,486 tons in the first five months in 2023 against 9,717 tons in the same period in 2022.  Most of the exports were delivered in liquid form to customers up to 500 km from the Szazhalombatta plant which is located at the Danube refinery.  One of the main maleic anhydride applications includes the manufacture of unsaturated polyester resins.

Aniline imports into Hungary amounted to 62,486 tons in January to May this year against 48,143 tons in the same period in 2022.  Imports of aniline from China amounted to 11,067 tons whilst imports from the BorsodChem Ostrava plant in the Czech Republic totalled 32,864 tons against 46,056 tons in the same five months in 2023.  Imports from Belgium rose from only 799 tons in January to May 2022 to 18,555 tons this year.

Central European MDI trade Jan-Jun 2023

MDI imports into the Czech Republic totalled 19,170 tons in the first six months in 2023 against 19,061 tons in the same period in 2022.  Hungary provided the largest share of imports at 5,996 tons followed by Belgium with 4,793 tons.  Average MDI prices decline from €2615.9 per ton to €2423.6 per ton. 

MDI imports into Poland dropped from 79,834 tons in the first six months in 2022 to 71,852 tons in the same period this year.  Hungary and Germany remain the two largest import sources, with overall average prices comprising €2239.7 per ton in January to June 2023 against €2534.6 per ton last year.  Overall costs for MDI imports dropped from €202.344 million in the first half last year against €160.929 in the same period in 2022.

 Hungarian MDI exports dropped in January to May 2023 to 103,002 tons versus 75,453 tons in the same period in 2022.  Poland represented the largest destination with deliveries

amounting to 15,968 tons, down from 18,062 tons, followed by Germany which reduced purchases from 10,646 tons to 8,645 tons. 

The most notable destination fall came from the US where shipments declined from 22,032 tons in January to May last year to zero this year.  MDI export prices dropped from €2585.1 per ton in the first five months in 2022 to €2243.9 this year.  

Central European TDI trade Jan-Jun 2023

TDI exports from Hungary amounted to 99,916 tons in the first five months in 2023 versus 128,215 tons in the first five months last year, with average prices rising this year to €3036.4 per ton from €2686.6 per ton in January to May 2022.  TDI exports to Turkey amounted to 14,493 tons in the first five months in 2023 against 18,080 tons last year whilst Italy reduced imports from Hungary from to 8,217 tons. 

Polish imports dropped from 9,869 tons to 12,642 tons.  Belgium took 14,166 tons in January to May this year down from 18,061 tons, whilst Romania reduced purchases slightly from 6,198 tons 5,486 tons.

Hungary remains the largest supplier of TDI to the Polish market, although volumes fell in value from €39.326 million in the first five months in 2022 to €35.542 million in the same period this year.   

Overall Polish TDI import costs declined from €110.810 million in the first six months in 2022 to €99.284 million.  Despite the fall in volumes from 39,970 tons to 33,547 tons average prices for TDI increased from €2793.0 per ton to €2974.9 per ton this year.   European demand for TDI is faced by recessionary trends and slowly declining feedstock costs.  In effect only global capacity constraints can help to sustain prices. 

Hungarian polyol imports Jan-May 2023

Hungarian polyol imports amounted to 17,695 tons in the first five months this year against 13,214 tons in the same period in 2022. 

Belgium was the largest supplier this year, shipping 9,880 tons.  Major suppliers of polyols to Hungary in 2022 included China with 11,091 tons and the Netherlands with 10,746 tons. 

MOL is currently constructing its new plant at Tiszaujvaros which should have probably been on stream now.  In June MOL fed propylene oxide into the pilot polyol plant and large-scale test production at the base is expected to start in the second half of 2023.  MOL is waiting for European markets to revive before starting production. 

Czech polyol imports Jan-Jun 2023

Czech polyol imports amounted to 25,075 tons in the first six months in 2023 against 21,679 tons in the same period in 2022.  The major sources of imports came from Belgium, France and Germany.  Polyol import costs increased in the first six months to €66.300 million from €60.501 million in January to June 2022 with average prices dropping from €2841.3 per ton to €2590.1 per ton.  Whereas prices ended the second quarter last year on an upward trajectory, the opposite trend occurred this year.  Over the second quarter prices dropped from €2583.1 per ton in April against €2457.2 in June.

Polish polyol imports Jan-Jun 2023

Polish polyol imports amounted to 71,856 tons in the first six months in 2023 against 79,529 tons in the same period in 2022.  The major sources of imports came from Belgium, Germany and the Netherlands. 

Polyol import costs dropped in the first six months to €101.085 million from €146.280 million in January to June 2022 with average prices dropping from €2660.4 per ton to €2157.6 per ton.  The largest source of imports came from Germany in the first six months, amounting to 16,899 tons against 14,319 in the same period in 2022.

Polish exports of polyols amounted to 19,378 tons in the first six months this year against 19,519 tons in the same period in 2022, but prices dropped from €2905.5 per ton to €2285.5.  Revenues from polyol exports dropped from €56.712 million in January to June 2022 to €46.525 million.  The largest destinations for Polish polyol export include Hungary, Italy and Denmark.

Central European methanol trade Jan-Jun 2023

Exports of methanol from Poland totalled 171,640 tons in the first six months in 2023 against 207,451 tons in January to June 2022.  Exports to Germany fell from 57,438 tons to 43,303 tons.  Ukraine imported 11,156 tons of methanol from Poland in the first half of 2023 versus 4,745 tons last year.  

Other destinations include the Czech Republic where Polish exports dropped from 40,111 tons to 32,407 tons whilst deliveries to Austria dropped from 39,196 tons to 29,359 tons.  Although export volumes were similar in the first two quarters, shipments in June amounted to only 14,775 tons which is partly due to the ban on Russian methanol taking full effect from 18 June.   

Russia reduced exports to Poland in January to June 2023 to 185,481 tons from 352,705 tons.   The EU embargo on Russian methanol took full effect from 18 June.  Norway shipped 48,713 tons in the first six months to Poland, against 16,787 tons last year, whilst Germany reduced exports to 28,922 tons from 61,606 tons. 

Imports of methanol into Poland totalled 349,892 tons in January to June 2023 versus 468,512 tons in the same period in 2022.   The average price for Polish imports comprised €303.4 per ton in the first six months against the average price of €374.3 per ton in January to June 2022.  

Czech imports of methanol amounted to 37,838 tons in the first six months in 2023 against 40,093 tons in the same period in 2022.  Russia accounted for 6,237 tons in January-June 2023 against 17,670 tons in 2022, but no deliveries have been made since May. 

Imports of methanol into the Czech Republic were dominated by Poland which increased shipments from 17,961 tons to 25,247 tons.  Average prices for methanol imports dropped from €444.705 per ton last year to €394.221 per ton.

Hungarian imports of methanol totalled 22,226 tons in January to May this year versus 25,784 tons in January to May last year.  Prices averaged €445.928 per ton in the first five months against €474.967 per ton in the same period in 2022. 

Russian chemical industry Jan-Jun 2023

Russian official statistics state that the production of chemicals and chemical products rose by 2.1% in the first half of 2023 against the first half of 2022.  Compared to June last year, the increase in June 2023 was 9.3%.  Chemical production volumes, dominated overall by fertilisers, showed stabilisation in the second quarter despite the significant changes in market dynamics and market sales. 

The production of plastic and rubber products for the first half of the year increased by 6.1%, with the increase in June recorded at 15.1%.

One of the main factors behind the growth in plastics production has been the strong demand for polyethylene pipes, used in gas and water.  Aside a general necessity to replace many domestic pipe networks for communal water supply, in the gas sector Gazprom has been forced to concentrate more on the domestic market (entailing the construction of gas pipelines) after losing much of its European gas export market.   Currently only a small proportion of Russia’s gas production is consumed internally by industry and domestic households. 

Russian base chemical production Jan-Jun 2023

The production of mineral fertilisers in the first half of 2023 amounted to 12.4 million tons which is 0.9% more than in the same period in 2022.  Fertiliser production decreased by 8.3% in the first quarter to 6 million tons but recovered in the second quarter. 

The best results were shown by the production of nitrogen fertilisers, where production increased by 6.5% over the same period in 2022 to 6.3 million tons. 

Production of phosphate fertilisers increased by 7.2% in the first quarter but then fell in the second which meant production for the six months was unchanged at 2.2 million tons.   The production of potash fertilisers dropped 7.0% in the first half of 2023. 

Russian ammonia production fell from 8.8 million tons to 8.6 million tons in the first six months.  Russia’s largest exporter Togliattiazot which has been unable to export through Odesa has concluded several agreements on the creation of railway links.  Construction has started for a terminal for transshipment of fertilisers in Taman and rail deliveries.

SIBUR develops alternative routes to new customers

SIBUR radically changed its export policy in 2022, redirecting about 4 million tons of its products from the European markets to the countries of Southeast Asia and Turkey.  However, transport companies were not ready to change routes and: delivery times increased by 30-100%, with delivery costs rising in some cases by 2.5 times.

The impact of sanctions on exports and shift from Europe to China meant that the share of land shipments increased from 17% in 2022 to 30% in the first half of 2023.  At the same time the share of sea shipments decreased from 82% to 70%.  Overall export delivery times have increased by 20-50 days, depending on the route.

One of the main problems for shipments through the Far East is still the high congestion of railways and port infrastructure.  In order to increase the stability and predictability of the supply chain, SIBUR is developing its vessel leasing business. It allows the company to be to a certain extent independent of sea lines, the regularity of ship calls and the transfer of ships, making it possible to form a production programme provided by its own fleet.  SIBUR has also concluded agreements with the Russian shipping company FESCO which operates out of the Pacific coast ports with aims to provide logistics solutions for deliveries to the Middle East and the Asia-Pacific region.   

Russian petrochemical production Jan-Jun 2023

Russian ethylene production increased in the first six months this year to 2.314 million tons against 2.204 million tons in January to June 2022.  Propylene production declined slightly from 1.452 million tons to 1.436 million tons.  

Russian butadiene production amounted to 256,005 tons in the first six months in 2023 against 316,871 tons in the same period in 2022.  Methanol production dropped sharply from 2.336 million tons in the first six months last year to 1.996 million tons, whilst butanol production rose from 116,700 tons to 151,600 tons.  

Russian polymer production Jan-Jun 2023

The production of bulk plastics in Russia in the first six months this year amounted to 3.562 million tons versus 3.557 million tons in the same period in 2022.  Polyethylene production increased from 1.722 million tons to 1.832 million tons whilst PVC fell from 491,300 tons to 544,000 tons.  Due to sanctions polymer manufacturers have found opportunities to restructure their production and sales processes including through the reorientation of exports, increased domestic demand, growth of import substitution of brands and components, etc.  

Whilst demand for polyethylene and polypropylene has been growing polyamide production has been affected by lower exports and PVC by lower construction in the domestic market.  Polyamide production in Russia has also been affected by the tyre sector, with overall production dropping from 95,200 tons to 69,700 tons.  As the main Russian polyamide producer Kuibyshevazot reduced production from 88,400 tons to 59,600 tons.  Synthetic rubber production fell from 798,000 tons in January to June 2022 to 722,000 tons in the same six months this year.  Only exports of synthetic rubber to China have helped sustain production in Russia, with the tyre industry reporting much lower output.  Tyre production has been affected partly by the exit of Western manufacturers but mostly due to the drop in car sales against pre-war sales.

Russian ethylene production, Jan-Jun 2023

Russian ethylene production totalled 2.314 million tons in the first six months in 2023 against 2.204 million tons in January to June 2022. 

The main reason for higher output this year was due to ZapSibNeftekhim at Tobolsk which produced 767,907 tons, up from 646,753 tons from January to June 2022, and this was the main reason behind the rise this year.    Nizhnekamskneftekhim produced 327,726 tons of ethylene in January to June against 323,364 tons, whilst Kazanorgsintez reduced production from 331,292 tons to 328,494 tons.  The advantages for both Nizhnekamskneftekhim and Kazanorgsintez of joining the SIBUR group in 2021 have included the widening of raw material sources in addition to increased access to finance and technology. 

Other important ethylene producers included SIBUR-Kstovo in the Nizhniy Novgorod region which produced 220,209 tons in the first six months versus 206,769 tons in 2022.  SIBUR-Kstovo does not consume ethylene internally but sells to RusVinyl for PVC production and SIBUR-Neftekhim for ethylene oxide production.  For RusVinyl Solvay reached agreement to sell its stake to SIBUR in March for $433 million.  In July SIBUR-Neftekhim suffered a fire which interrupted ethylene oxide and glycols production for several days. 

In Siberia the Angarsk Polymer Plant produced 97,294 tons of ethylene in the first six months in 2023 versus 111,756 tons in the same period in 2022, whilst Tomskneftekhim reduced production from 148,938 tons to 143,850 tons.  Last year Tomskneftekhim switched to an increased overhaul interval from a two-year to a four-year cycle.

In Bashkortostan Gazprom neftekhim Salavat’s production was unchanged at 166,100 tons, whilst Ufaorgsintez increased production from 49,885 tons to 53,395 tons.  Stavrolen at Budyennovsk produced 164,100 tons of ethylene which was down slightly from 167,500 tons from January to June 2022.  

Russian propylene production, Jan-Jun 2023

Russian propylene production amounted to 1.437 million tons in January to June 2023 against 1.452 million tons in the same period last year.  ZapSibNeftekhim produced 524,260 tons in January to June this year up from 441,578 tons.  In Tatarstan Nizhnekamskneftekhim produced 164,300 tons of propylene against 161,700 tons in the first half in 2022 whilst Kazanorgsintez produced 25,921 tons against 27,453 tons.  

In Bashkortostan Gazprom neftekhim Salavat produced 74,137 tons of propylene in January to June 2023 versus 74,037 tons, whilst Ufaorgsintez reduced production from 84,400 tons to 82,308 tons.  In the Nizhny Novgorod region SIBUR-Kstovo reduced production of propylene from 91,400 tons to 85,285 tons, with the decline attributed to the loss of export opportunities.  Lukoil-NNOS at Kstovo reduced production from 161,821 tons to 121,185 tons which was lower due to some maintenance undertaken.

Russian propylene sales Jan-Jun 2023

Propylene exports from Russia amounted to 31,344 tons in the first six months in 2023 against 72,762 tons in the same period in 2022.  Lukoil-NNOS reduced export shipments from 44,762 tons to 15,236 tons whilst SIBUR-Kstovo did not ship propylene in the first six months after shipping 10,552 tons in the period January-June last year.  

Exports of propylene to Europe started to drop in the second half of 2022, and by the end of the year China was the only destination for Russian shipments.  Angarsk Polymer Plant shipped 15,625 tons in the first six months this year against 12,348 tons in the same period in 2022. 

Russian sales of propylene on the domestic merchant market amounted to 143,738 tons in the first six months in 2023 against 156,971 tons in the same period in 2022.  The largest propylene supplier to the domestic market was Lukoil-NNOS, shipping 112,279 tons against 93,039 tons in January to June 2022.  SIBUR Kstovo reduced domestic sales in the first six months from 85,619 tons in 2022 to 77,079 tons.

Russia’s largest merchant consumer Saratovorgsintez increased purchases of merchant propylene from 94,614 tons in the first six months last year to 98,198 tons, followed by SIBUR-Khimprom at Perm which increased purchases from 14,867 tons to 23,140 tons.  ZapSibNeftekhim reduced purchases from 74,020 tons to 35,847 tons. 

Other consumers of merchant propylene in Russia include Akrilat at Dzerzhinsk which reduced purchases from 17,115 tons in the first six months last year against 13,226 tons in the same period in 2022.  Akrilat uses propylene in the production of acrylic acid and acrylates. 

Russian butadiene production Jan-Jun 2023

Russian butadiene production amounted to 256,005 tons in the first six months in 2023 against 316,871 tons in the same period in 2022.  From the group of olefinic monomers, butadiene has been affected most of all from sanctions on the Russian petrochemical industry. 

ZapSibNeftekhim reduced production from 143,568 tons in January to June 2022 to 110,543 tons this year, whilst Nizhnekamskneftekhim reduced production from 112,280 tons to 86,907 tons.  Butadiene production in Russia has fallen over the past year in line with lower production of synthetic rubber.

Russian plastics and polyethylene production Jan-Jun 2023

The production of bulk plastics in Russia in the first six months this year amounted to 5.377 million tons versus 4.450 million tons in the same period in 2022.  Despite the challenges presented by sanctions the production of bulk plastics has performed at stable levels.  Most of the growth this year has come from polyethylene.  The production of styrene polymers in Russia increased by 0.6% but at the same time falls were recorded in the production of polyamides, PVC, and urea-formaldehyde resins.  PVC production in the first half of 2023 amounted to 491,300 tons, which is 10% lower than for the same period last year.

Polyethylene production totalled 1.832 million tons in the first half of 2023 against 1.722 million tons in 2022.  By comparison production of polyethylene in the first half of 2019 amounted to 1.144 million tons and since then the increase has been largely driven by output at Tobolsk after the ZapSibNeftekhim complex started at the end of 2019. 

Russian polymer pipe market Jan-Jun 2023

Domestic consumption of plastics has increased this year as domestic manufacturers have filled some market gaps left by Western companies that had previously sold into Russia.  The production of polymer pipes in Russia rose from 488,600 tons in the first half of 2022 to 572,200 tons in the same period this year.  Production of polymer plates, sheets and film rose from 742,300 tons to 796,000 tons whilst porous plastics increased from 188,600 tons to 234,400 tons.  Only non-porous plastics recorded a decline, dropping from 304,700 tons to 273,300 tons in January to June 2023.

ZapSibNeftekhim-coloured polyethylene pipe grades

ZapSibNeftekhim produced the first batches of coloured polyethylene pipe grades in July, producing grades for the first time in Russia such as blue HD 03505 RC blue and orange HD 03505 PE orange Particularly strong RC grades are used in the production of polymer pipes, as well as an outer or inner layer in multilayer solutions for water and gas supply systems.   Current consumption in Russia is estimated at around 25,000 tpa.

Until mid-2023, Russian demand for RC brands was completely covered by imports.  Until the beginning of 2022, the main suppliers to were Borealis, LyondellBasell and SABIC, located in Sweden, Germany and Finland. After February 2022, European producers began to curtail the supply of RC grades to Russia. Russian pipe manufacturers experienced an acute shortage of them and assessed the problem with their supply as one of the priorities.  In total, ZapSibNeftekhim operates four production lines for the production of various grades of polyethylene with a total capacity of 1.5 million tpa. Currently, the production of 36 grades of polyethylene has been mastered, of which six are intended for the production of pipes, including three related to black, one to white and two new to colour.  In general, the new pipe grades are part of SIBUR’s attempts to fill parts of the market which previously depended on Western imports. 

Russian polyethylene trade Jan-Jun 2023

Russian exports of polyethylene to China fell from 165,437 tons in January to June 2022 to 100,399 tons in the same period in 2023.  HDPE exports from Russia to China dropped from 73,191 tons in the first six months in 2022 to 45 tons. 

Overall Chinese polyethylene exports to Russia amounted to $97 million against $36 million last year.  By volume exports increased from 19,200 tons to 50,100 tons in January to June this year.

Imports of polyethylene from China into Russia are more diversified than Russian exports to China and include higher grades such as ethylene-vinyl acetate copolymers. EVA imports into Russia from China amounted to 6,779 tons in the first six months this year against 8,926 tons for the whole of 2022.  Import values of EVA from China amounted to $24.062 million in the period January to June 2023 versus a total of $27.761 for last year’s full shipment. 

Partly due to increased domestic production at Tobolsk, exports of polyethylene from South Korea to Russia showed signs of slowing in the first six months this year.  Exports dropped from 89,100 tons in January to June 2022 to 56,600 tons in the same period in 2023.

Russian polypropylene market Jan-Jun 2023

Whilst polyethylene consumption has been boosted in the past year by the manufacture of pipes, the polypropylene market in Russia has been weaker dropping by 5.5% in 2022 against 2021 and totalling 1.332 million tons.

Regarding external trade for polypropylene exports to China have increased since the second quarter last year.   By volume Russia shipped 99,300 tons of polypropylene to China in the first six months versus only 18,114 tons in the same period in 2022, with revenues rising from $21.444 million to $83.800 million.   However, over the first half year volumes of exports have been following a gradual decline.

Russian imports of polypropylene increased in the first half of 2023 to 23,666 tons from 7,951 tons in the same period last year.  Values increased from $17.395 million to $67.763 million.

SIBUR's new polypropylene production facility in Tobolsk will have a capacity of 570,000 tpa.

SIBUR’s new project for a polypropylene plant at Tobolsk, with a capacity of 570,000 tpa, is designed in part to use the propane available already at the site.  The plant is targeted for a start-up in 2027.  The dehydrogenation of propane and the construction of a polypropylene plant at Tobolsk will allow SIBUR to utilise the feedstock instead of export.  Another incentive for constructing the plant is the reverse excise tax from the Ministry of Energy which provides financial advantages for constructing petrochemical plants.  ZapSibNeftekhim is currently the largest petrochemical complex in Russia. Its capacity is 2.5 million tpa of basic polymers (1.5 million tpa of polyethylene and 1 million tpa of polypropylene).

PTA deliveries from China to Kaliningrad

PTA exports from China to Russia totalled 131,577 tons in the first six months in 2023 against 105,334 tons in the same period in 2022 and 136,600 tons in 2021.  PTA imports from China continue to provide the main basis for feedstock supplies for Ekopet at Kaliningrad.  Russian imports from China amounted to $105.334 million in value the first six months against €84.400 million in 2022, with average prices dropping from €841.340 per ton to €800.554 in January to June 2023.

Regarding PTA production at Polief, recent technical difficulties were reported in June although the plant is operating at full capacity.   Polief’s PTA production is consumed mostly within the integrated complex for PET production.  Any small volumes left for surplus are usually sold to SIBUR subsidiary SIBUR-PETF at Tver.  

Russian PET market and imports from China

PET imports into Russia from China amounted to $130.8 million by value in the first six months in 2023 against $143.8 million in the same period in 2022 and $82.0 million in 2021.

By volume this converted into 140,696 tons versus 130,464 tons in January to June 2022 and 107,835 tons in the same period in 2021.  

Russian PET imports from China in 2022 amounted to a total of 238,000 tons, which is 34.7% more than in 2021.  As a result, the share of Chinese PET in total Russian imports increased from 84% to 95%.  Russia imported 194,260 tons of PET from China in 2021 for $194.690 million, whilst Import values rose to $296.478 million. 

Russian PTA-PET projects

Tatneft has largely completed the construction of aromatics complex at Nizhnekamsk, including 60,000 tpa of benzene and 150,000 tpa paraxylene.  However, production has yet to start on a commercial scale as both benzene and paraxylene remain in surplus in Russia.  Ultimately Tatneft wants to build a PTA plant and then set up a regular transshipment delivery system to Ekopet at Kaliningrad. 

The benzene market in Russia could improve to allow production to start and sales to be profitable, but paraxylene is more difficult with only one producer of PTA operating in Russia and excess product available from the three paraxylene producers in Russia. 

The main problem facing Russian paraxylene sales is the sanctions imposed by the EU from July 2022 which prevents sales to Europe.  In the second quarter last year the Russian armed forces entered into Ukraine Ufaneftekhim was completing its expansion of paraxylene capacity from 165,000 tpa to 260,000 tpa.  Paraxylene production in Russia totalled 251,000 tons in 2022 and is expected to be lower in 2023. 

Russian rubber feedstocks Jan-Jun 2023

C4 purchases made by Russian synthetic rubber producers amounted to 209,000 tons in the first half in 2023 against 192,100 tons in the same period in 2022.  Nizhnekamskneftekhim purchased 68,500 tons against 53,900 tons. 

Togliattikaucuk reduced purchases from 86,100 tons to 82,300 tons whilst Omsk Kaucuk increased purchases from 44,700 tons to 56,000 tons.  Omsk Kaucuk purchases C4s on top of its own production. Work has recently started on the second stage of modernisation of its C4 unit which will increase the processing of technical butane by around 25%.  The goal of the project is to provide consistently high loads for the MTBE production unit, as well as to increase the production of normal butane and pentane fractions. Modernisation of production will increase the processing of technical butane fraction at Omsk Kaucuk to 210,000 tpa.

Russian butadiene production totalled 119,372 tons in the first half of 2023 against 172,003 tons in the same period in 2022.  The largest producers ZapSibNeftekhim and Nizhnekamskneftekhim both showed lower production as 2022 progressed. 

ZapSibNeftekhim produces butadiene only for merchant market sales whilst Nizhnekamskneftekhim processes most of its butadiene into rubber SKD-N and SKD-L are butadiene rubbers based on neodymium and lithium catalysts. 

Russian rubber production and consumption Jan-Jun 2023

Russian production of synthetic rubber in the first half of 2023 in Russia amounted to 722,000 tons which was lower by 9.3% against the same period last year.  Second quarter volumes, from April to June, amounted to 364,000 tons against 365,000 tons last year but 413,000 tons in 2021.  Although this year’s second quarter data showed a recovery against the first quarter, prospects for the second half of 2023 are not promising.

Regarding production additives NPP Macromer has completed pilot tests of the new reagent Macromer SP-9 at the facilities of Voronezhsintezkaucuk.  This product was developed at the request of SIBUR to replace the previously used anti-agglomerators Sokalan from BASF and Geropon from Solvay.  The dispersant Macromer SP-9 is a copolymer of alpha-olefin and maleic anhydride.  Both raw materials are produced by SIBUR. 

Whilst export trade with China has helped to replace European business, the domestic tyre industry remains suppressed by weak demand.  Due to fluctuating trade patterns moreover, production volumes in the second quarter varied sharply, ranging from 146,000 tons in May to 97,000 tons in June.  As long as China keeps buying Russian producers should be able to maintain reasonable capacity utilisation rates.

The sharp declines in the Russian automotive sector meant that rubber consumption in the production of passenger car tyres fell from 195,900 tons in the first six months in 2022 to 146,300 tons in the same period this year.  Tyres for the agricultural sector also have fallen, dropping from 6,700 tons in the first six months last year to 5,500 tons.  The only sector to show growth was for lorry tyres where consumption rose from 23,500 tons to 23,500 tons. 

Russian-Chinese trade Jan-Jun 2023

Both exports to China and imports from China of synthetic rubber have increased sharply in the past twelve months, as producers have been forced to reorient trade away from Europe.  Sanctions on EU trade do not come until full force until June 2024, which does allow some shipments to traditional partners.  However, Russian producers have been developing the Chinese market whilst European consumers have been diversifying their sources of synthetic rubber.  The sanctions deadline of 30 June 2024 at least buys time for producers to fully adapt to the new markets. 

The value of Russian synthetic rubber exports to China amounted to $370.515 million in the first six months this year against $238.023 in the same period in 2022. 

By volume this resulted in an increase from 133,340 tons to 254,477 tons.  Imports of synthetic rubber into Russia from China amounted to $43.333 million in the first six months in 2023 against $15.957 in 2022.

The largest categories of synthetic rubber exports comprised butyl rubber, butadiene rubber and SBRs.  All of the main product categories recorded rises in the first six months, apart from halogenated butyl rubber which dropped from 29,764 tons to 25,223 tons in January to June 2023.  Butyl rubber exports, by contrast, increased from 44,727 tons in January to June 2022 to 54,630 tons. 

In other product groups, butadiene rubber exports from Russia to China increased from 8,170 tons to 50,886 tons and isoprene rubber from 23,869 tons to 26,839 tons. 

Exports of SBRs under HS code increased from 14,041 tons to 49,692 tons.  Product values rising from $20.890 million to $57.554 million.  It should be noted that volumes in 2021 were higher than in 2022.  In 2021 Germany was the main buyer of Russian rubbers (20% of Russian exports), but in 2022 China took the leading position with 21% of Russian exports. 

Whilst China is now the most important market for Russian rubber exports, trade with Europe is allowed in some product areas to continue until June 2024.

Russian methanol production Jan-Jun 2023

Russia produced 1.996 million tons of methanol in the first six months in 2023 against 2.336 million tons in the same period in 2022.  Most producers recorded a decline in production, with only Metafrax Chemicals reporting a slight increase from 565,825 tons to 589,140 tons.   Gazprom Methanol reduced production slightly from 374,790 tons to 369,470 tons.  Exports to China from Gazprom Methanol amounted to 206,050 tons in the first half year. 

The largest producer remained Shchekinoazot which produced 674,62 tons in the first six months against 759,631 tons last year.  Tomet reduced production from 241,793 tons to 119,450 tons in January to June 2023 whilst Azot at Novomoskovsk reduced production from 117,525 tons to 9,320 tons.  Ammoni in Tatarstan reduced methanol production from 55,134 tons in the first six months in 2022 to 204,818 tons in the same period in 2023.   

The Russian government is seeking to impose a new bill on controlling methanol supply in an attempt to control the excess number of deaths from alcohol poisoning.  This is a long-term problem for Russian society.  Domestic producers are expected to cooperate in any new controls, even though this may mean increased costs.   

Russian methanol exports, Jan-Jun 2023

Russian producer exports of methanol fell from 1.1 million tons in the first six months in 2022 to 891,300 tons in the same period in 2023.  Tomet reduced exports to 39,300 tons of methanol against 119,000 tons last year.  Metafrax Chemicals reduced exports from 119,300 tons in January to June 2022 to 163,600 tons whilst Gazprom Methanol increased exports from 106,300 tons to 134,700 tons.  

The largest Russian exporter was Shchekinoazot which shipped 363,400 tons in the first six months in 2023 against 568,000 tons last year.  Azot at Novomoskovsk increased methanol exports in the first six months to 44,600 tons from 37,900 tons in the same period in 2022.  This is despite the plant producing only 9,320 tons in the first half this year.

In the first six months this year China represented the largest destination for Russian methanol exports, accounting for 377,171 tons from the total 891,676 tons.  Finland accounted for 91,370 tons of Russian methanol, down from 290,211 tons in January to June 2022 whilst Poland reduced inward shipments from Russia from 219,739 tons to 126,002 tons.  Exports to the Netherlands dropped to 20,814 tons from 124,472 tons. 

Direct exports to Hungary, Romania, Slovakia and Ukraine stopped earlier in 2022, whilst the full EU sanctions on Russian methanol took effect from 18 June.   The reorientation to new markets in the Asia-Pacific region, at this stage solely China, has been accompanied by a multiple increase in transport costs.

Nearly all Russian exports to China go through the port of Nakhodka-Vostochny.   Gazprom Methanol from Tomsk has been the leading supplier to China this year shipping 206,050 tons.  Rail costs from Tomsk are estimated at around $130 per ton, whilst as the second largest exporter Metafrax the tariff rises to $160 per ton.  For shipments from Togliatti and Shchekino, rail costs are estimated at $182 and $200 per ton respectively which at current prices yields

Rail costs have been partially mitigated by state support aimed at reducing the cost of transporting methanol, but sending product to China remains much less profitable than to EU markets.  Paradoxically, by being too profitable increases the spectre of windfall taxes being imposed by the Ministry of Finance in order to support the Russian military. 

Russian methanol domestic sales, Jan-Jun 2023