New PMMA plant for Novokuibyshevsk - Issue 236 || SANORS-plans to construct large chemical complex - Issue 268 || Russian cracker feedstocks - Issue 268 || Ricoal plans coal based chemical complex in Rostov region - Issue 268 || SIBUR, updated Q1 2013 results - Issue 271 || Synthos, Jan-Jun 2013 - Issue 274 || Eastern Petrochemical Company-challenges faced in completion of refinery & cracker - Issue 274 || Nizhnekamskneftekhim-FEED for new cracker - Issue 274 || Tobolsk-Neftekhim, gas fractionating plant - Issue 274 || Unipetrol-Ineos licence for Innovene HDPE plant - Issue 275 || Russian chemical industry projections 2013 - Issue 275 || Gazprom-Belogorsk gas-chemical & helium project - Issue 275 || Nizhnekamskneftekhim, polyolefin projects - Issue 275 || Russian benzene, Jan-Sep 2013 - Issue 275 || Russian paraxylene-PTA - Issue 275 || Nizhnekamskneftekhim-isoprene rubber - Issue 275 || TVK-butadiene project construction - Issue 275 || Russian investment in the gas-chemical industry - Issue 278 || Vyngapur to become centre for natural & associated gas - Issue 278 || VNHK-loan approved for Nakhokda petrochemical project - Issue 278 || LUKoil-Budyennovsk petrochemical investments - Issue 278 || Russian chemical production 2013 - Issue 278 || Novatek expandsf Purovsky gas condensate plant - Issue 278 || Russian styrene market 2013 - Issue 278 || Russian polycarbonates 2013 - Issue 278 || Russian synthetic rubber production 2013 - Issue 278 || Russian butanols production 2013 - Issue 278 || United Petrochemical Company-epoxy resins - Issue 278 || Russian butanol exports, Jan 2014 - Issue 279 || Russian pentanes, Jan-Feb 2014 - Issue 280 || Russian propane, Jan-Feb 2014 - Issue 280 || Grupa Azoty 2013 - Issue 280 || Synthos-Brazil - Issue 281 || Ukraine-financial performance chemcal companies 2013 - Issue 281 || Russian ethylene market, Q1 2014 - Issue 281 || Russian polypropylene, Q1 2014 - Issue 281 || Synthos-Q1 2014 - Issue 282 || Grupa Azoty investment projects - Issue 282 || Russian chemical production, Q1 2014 - Issue 282 || Prospects for Irkutsk petrochemical projects after Russian-Chinese gas deal - Issue 282 || Russian PTA import duties - Issue 282 || SIBUR-Sinopec jv for rubber production in China - Issue 282 || KZSK Silicon credit line - Issue 282 || UzIndoramaGasChemical - Issue 282 || Zapsibtransgaz-Gubkinsky - Issue 284 || Irkutsk Oil Company-Power of Siberia - Issue 284 || VNHK-Nakhodka - Issue 284 || United Petrochemical CompanyAlpek PTA & PET jv - Issue 284 || Gazprom neftekhim Salavat-acrylic project - Issue 284 || Nefis Cosmetics 2013 - Issue 284 || Air Products-new industrial gas project at Rostov - Issue 284 || Khimprom-Novocheboksarsk - Issue 284 || Uzbek petrochemical projects - Issue 284 || Turkmen PVC project - Issue 284 || SIBUR-Kstovo, ethylene expansion - Issue 285 || Russian ethylene and propylene - Issue 285 || Russian synthetic rubber market - Issue 285 || Oltchim, Jan-Sep 2014 - Issue 288 || Russian chemical industry, Jan-Oct 2014 - Issue 288 || Angarsk Polymer Plant-new polyolefin plants - Issue 288 || Synthos Q1 2015 - Issue 294 || Nizhnekamskneftekhim Q1 2015 - Issue 294 || Central European olefin production - Issue 295 || Synthos-Brazil - Issue 295 || Russian chemical production & markets, Jan-Jun 2015 - Issue 296 || Nizhnekamskneftekhim-updated ethylene project plans - Issue 296 || Russian phthalic anhydride market - Issue 296 || Saratovorgsintez-logistics - Issue 296 || Zapsibneftekhim & Yuzhniy Balyk - Issue 297 || Unipetrol-Technip polyethylene project - Issue 298 || Effects of low oil prices & rouble devaulation on Russian petrochemical industry - Issue 298 || SIBUR-energy products, first half of 2015 - Issue 299 || Rosneft project update-Eastern Petrochemical Company (VNHK) - Issue 300 || Nizhnekamskneftekhim new ethylene project - Issue 300 || Other Russian ethylene project news - Issue 300 || Kuibyshevazot, Jan-Sep 2015 - Issue 300 || Metafrax, Jan-Sep 2015 - Issue 300 || Russian phthalic anhydride, Jan-Sep 15 - Issue 300 || Samsung-aromatics complex at Ustyurt in Uzbekistan - Issue 300 || Czech petrochemical trade, Jan 2016 - Issue 304 || Czech synthetic rubber trade - Issue 304 || Kazanorgsintez Jan-Dec 2015 - Issue 304 || Nizhnekamskneftekhim Jan-Dec 2015 - Issue 304 || Angarsk cracker outage creates problems for Irkutsk petrochemical industry - Issue 304 || Russian LDPE market 2015 - Issue 304 || Russian paraxylene-PTA - Issue 304 || Russian benzene market, Jan-Feb 2016 - Issue 304 || Russian methanol domestic sales, Jan-Feb 2016 - Issue 304 || Metafrax Jan-Dec 2015 - Issue 304 || Russian butanol sales, Jan-Feb 2016 - Issue 304 || Russian DOP market-Sayanskkhimplast outage - Issue 304 || Russian phthalic anhydride market, 2015 - Issue 304 || Revised capacity of Amur Gas Processing Plant - Issue 305 || Gazprom processing Blagoveshchensk announces consultancy tender for Amur GPP - Issue 305 || Gazprom Design-Amur GPP - Issue 305 || Svobodny meeting in March, Amur GPP - Issue 305 || SIBUR starts preparations on the selection of the licensor for Amur Gas Chemical Complex - Issue 305 || Gazprom tender for 60.7 km section of pipeline Power of Siberia - Issue 305 || Work on checkpoint on Amur-China border - Issue 305 || NIPIGas-Amur GPP & domestic equipment. - Issue 305 || Lukoil sells Karpattneftekhim - Issue 315 || Russian rubber exports, Jan-Dec 2016 - Issue 315 || SIBUR-associated & natural gas prices - Issue 316 ||
 
  


 

CIREC Search Engine (free search)-Sample Topics listed below

Project  Product  Company
ZapSibNeftekhim Acrylates PKN Orlen
Amur Gas  Benzene Unipetrol
VNKH Butanols MOL
Novy Urengoy Ethylene Synthos
PDH Poland  Propylene SIBUR
Nizhnekamskneftekhim Synthetic Rubber Kazanorgsintez
Kazanorgsintez Polypropylene Nizhnekamskneftekhim
Etana PVC Gazprom neftekhim Salavat
Ivanovo Polyester Paraxylene Karpatneftekhim
SafPet PTA Kuibyshevazot
SOCAR Polymer Methanol Shchekinoazot

Russian petrochemical industry wins from low oil prices

The petrochemical industry has been one of the star sectors in the Russian economy over the past few years, and has strikingly out-performed GDP which has been stuck mostly in the doldrums. Lower oil prices may have significantly dented the Russian government’s budgetary finances, but the trend has been broadly beneficial to the petrochemical industry. Both in terms of facilitating lower feedstock costs and the devaluation of the rouble Russian petrochemical producers have witnessed sharp rises in revenues and profits in the past 10 quarters. The devalued rouble has meant that Russian producers have been able to compete against imports on the domestic market and also for exports to be more profitable. The downside of the lower rouble relates to equipment and technology costs where Russia is dependent primarily on imports. Certain types of equipment can be replaced by domestic production, but most of the key plant licenses such as for olefins, polyolefins and organic chemicals are available only from foreign companies.

The major petrochemical project currently under construction in Russia comprises SIBUR’s ZapSibNeftekhim complex at Tobolsk in West Siberia, where the 1.5 million tpa cracker is scheduled for completion by 2019. Aside Tobolsk, the key project ideas are being developed in East Siberia and the Russian Far East. SIBUR is considering the construction of a similar complex to Tobolsk in the Amur region close to the Chinese border where Gazprom is currently constructing the world’s gas processing plant. Rosneft is in the throes of constructing a large refinery and petrochemical complex at Nakhodka in the Russian Far East whilst other petrochemical projects are being evaluated by Rosneft and Chinese partners for East Siberia. Petrochemical and fertiliser plants in the eastern regions of Russia can provide huge export opportunities to China and other parts of Asia and help to monetise feedstock potential.

Smaller but equally important projects are being undertaken in the western parts of Russia which indicate that Russia can expect to see a sharp rise in petrochemical production over the next decade. Low oil and gas prices help to encourage investing downstream and seeking value added opportunities. The main concern for Russian petrochemical companies is the state of the domestic economy which may have come through the worst of its most recent downturn, but offers little more than modest growth rates for the foreseeable future. Economic reform is seen by even by parts of the government as the key to unlocking Russia’s economic potential, but these reforms are largely in conflict with the regime’s primary concern of retaining power. Despite the political stagnation, the Russian chemical industry seems capable of performing strongly on its own and can be expected to become more important globally over the next decade.

Russia’s neighbours seek to add value

Russia’s western neighbours include Ukraine where polymer consumption revived in 2016 after the large falls in 2014 and 2015. Currently Ukraine lacks much of its own chemical production due largely to the political all-out with Russia and impact on feedstock availability. As the country strives to realign its economic strategy away from Russia towards European markets the country may offer opportunities as a chemical consumer and the possibility for jvs in small tonnage chemistry. Belarus operates a stable production regime for chemicals and petrochemicals, and depends on Russia for nearly all its feedstocks. Its main production areas include acrylonitrile, caprolactam, methanol, polyesters and olefins. Russia’s southern neighbours are characterized by large hydrocarbon deposits but low consumption in chemical products. Major projects in the petrochemical industry are underway in the construction stages in Turkmenistan, Azerbaijan and Kazakhstan, all of which are aimed at export activity.

Central European chemical industry, modernisation and innovation

Since Central European countries joined the EU in 2002 the chemical industry in this region has undergone huge changes in terms of technological conformity to EU technical standards. PKN Orlen and MOL have emerged as the dominant companies in the petrochemical industry combining assets in Poland and the Czech Republic, and Hungary and Slovakia respectively, whilst the consolidation and expansion of Grupa Azoty has created one of Europe’s leading fertiliser producers. Polish companies have been prepared to invest outside the country whilst at the same time seeking new products to be introduced to the market. By contrast to Central Europe, South East Europe’s chemical industry has regressed in the past decade but there are some indications of outside investment in Serbia and Romania. The major projects being undertaken in Central Europe include Unipetrol’s new HDPE plant, Grupa Azoty’s PDH propylene plant, Orlen’s new metathesis project for propylene and MOL’s synthetic rubber plant in Hungary.

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Russian Chemical Trade Balance 2016

The Russian trade deficit in chemicals remains largely unchanged from 2015, although the amount spent on both exports and imports has fallen.  Imports have fallen in the past three years due to budgetary constraints from the government and the devalued currency, which has prevented companies from buying as much as before, whilst at the same time exports have fallen at least in value due to the significant changes in oil and gas pricing. 

Although there were slight declines in the value of import shipments for polymers and organic chemicals in the period January to November 2016, imports of pharmaceuticals actually showed an increase over the same period in 2015.  However, the volumes still remain insufficient to meet the demand from hospitals and the domestic manufacturers have thus far not been able to replace much in the way of imports.  Pharmaceutical production in Russia rose by around 8% in 2016, but this is not fast enough in terms of both quantity and quality to comply with the government’s ideas of import substitution.  Much hope is placed by Russian government on the new US President this year to soften economic sanctions and improve economic relations, but ultimately the success of the Russian economy depends on internal reform.  Efforts to push through liberalisation have to date have been easily thwarted by those with a vested interest in the current hybrid economic system, but until a political overhaul can be achieved the prospects for GDP growth will remain weak at best.  


Russian Chemical & Petrochemical Production by month

Russian Chemical & Petrochemical Exports by month

Russian Chemical Prices (euro per ton) by month

For specific products or product groups of interest, please select below

Exports

Imports

Aromatics

TDI

Propylene

Isocyanates

Styrene

PTA

Synthetic Rubber

MEG

Caprolactam

Butadiene

Acetone

Synthetic Rubber

Polymers

Polyethylene

Oxo Alcohols

Polypropylene

Methanol

Polystyrene

Acrylonitrile

Polyamide

Other Products

Other products

 


 

 


PKN Orlen

PKN Orlen Sales Revenues 2016

Country

2016

2015

Poland

42.4

41.

Germany

19.8

19.3

Czech Republic

12.4

12.1

Baltic States

7.8

7.8

PKN Orlen strengthened its revenue sales in 2016 to its key markets, primarily in Poland, Germany and the Czech Republic.  In 2015 sales revenue of the group PKN Orlen on the three most important markets amounted to zl 63.97 billion, which accounted for 72.4% of total company sales.

In 2016, revenues for the Polish, German and Czech decreased to zl 59.37 billion, an increase of slightly more than 7%.  However the share of each of these three markets in the sale of the group PKN Orlen increased because the total decrease in revenue was higher and amounted to almost 10%. 

As a result, the share of the three key markets for the group PKN Orlen has increased to nearly three-quarters (74.6%).  In terms of individual countries gained most Polish market (an increase of 41% of the shares to 42.4%).  For the German mart there was an increase of 19.3% to 19.8% and the Czech Republic an increase of 12.1 %  to 12.4%.

PDH Poland

Czech Petrochemical Imports

(unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Ethylene

124.9

41.9

Propylene

133.2

43.8

Butadiene

54.0

32.8

Benzene

84.2

90.6

Ethylbenzene

56.5

20.8

On 20 January 2017 PDH Poland Invited statements of interest for general contracting in the formula turnkey project at Police.  The contract includes installation for the production of propylene by propane dehydrogenation.  The contract also includes plans for a sea terminal for unloading and storage of propane and electricity switchboard. 

The tender also provides the option in the form of construction of a plant for the production of polypropylene.  Originally, the deadline for submitting claims was established on 20 February 2017, and then it was extended to 1 March.  Selecting the general contractor is expected to take place by December 2017.

Shares have been created for investments into PDH Poland, valued at around zl 2.69 billion.  Up to 5.2 million shares have been offered to support the construction of the 427,000 tpa propylene plant. 

Grupa Azoty’s management board endorsed the proposal addressed to the Supervisory Board on the Board's consent to the acquisition of fixed assets in the form of 203,125 registered shares of a new issue of series C shares of PDH Poland in connection with the planned share capital increase of the company PDH Poland.

Currently, the company owns 500 000 registered shares of series B PDH Poland with a total nominal value of PLN 5 000 000.00 z PDH share capital of Poland.   Under the adopted resolution adopted application addressed to the Supervisory Board on the consent of the bosses for the purchase of 203 125 registered shares of a new issue of series C shares of PDH Poland with a nominal value and issue price of 10 z    The acquisition of shares will take place through the acquisition by the company in the increased share capital of PDH Poland.   Acquisition of new shares of series C will result in a closed subscription by offering new shares to the shareholders who have the pre-emptive right with respect to the number of shares held by them. 

PKN Orlen-propylene

PKN Orlen signed an agreement with Basell Orlen Polyolefins for sale 100,000 tpa of propylene.  Under the contract PKN Orlen will supply propylene to the BOP, the production of which will start after putting into use currently under construction in the Production Plant in Plock installation metathesis.

The installation of a metathesis unit built on the Plock site and will produce propylene polymer quality.  The current capacity is 450,000 tpa and the investment will increase production capacity to 550,000 tpa.  Completion of installation and commissioning is planned for the second half of 2018.  The annual value of the agreement between PKN Orlen and BOP amounts to approximately zl 350 million and is an extension of the original agreement when BOP was founded in 2002.

Slovnaft maintenance investment April-June 2017

Slovnaft to invest millions of euros into overhaul.  The Bratislava-based oil refinery plans an investment, citing a general overhaul of production technologies as the main goal.  The investment by Slovnaft will amount to €57 million, of which approximately €33 million have been allocated for repairs and 24 million euros for modernisation.

The aim is to reduce energy consumption in the production of crude oil products and increase safety.  Due to the overhaul, Slovnaft is to shut down sixteen production units after Easter.  The plan is to resume full operation in mid-June 2017.

Czech petrochemical trade 2016

Serbian Chemical Exports (unit-kilo tons)

Product

Jan-Nov 16

Jan-Nov 15

Polyethylene

107.6

78.8

Polypropylene

16.1

17.4

Styrene Butadiene Rubber

12.4

10.0

Methanol

104.7

5.2

Acetic Acid

61.5

1.9

Ethylene imports into the Czech Republic slowed to a trickle in the fourth quarter last year as the Litvinov cracker resumed production after the year-long maintenance and modernisation process.  Imports of ethylene into the Czech Republic totalled 124,400 tons in 2016 against 41,900 tons in 2015, whilst propylene imports rose from 43,800 tons to 133,200 tons in 2016.  Propylene imports were sourced mostly from the EU, including Germany, the Netherlands and Poland, whilst outside of the EU imports came from Petrohemija in Serbia and amounted to 27,264 tons in 2016 against only 2,603 tons in 2015. 

Polish Chemical Production (unit-kilo tons)

 Product

Jan-Feb 17

Jan-Feb 16

 Caustic Soda Liquid

57.1

55.6

 Caustic Soda Solid

12.8

13.5

 Soda Ash

136.0

199.2

 Ethylene

78.5

93.9

 Propylene

55.6

66.7

 Butadiene

8.6

10.2

 Toluene

3.8

2.6

 Phenol

7.1

7.0

 Caprolactam

29.8

26.7

 Acetic Acid

2.8

1.0

 Polyethylene

53.9

66.1

 Polystyrene

8.4

9.5

 EPS

10.9

12.5

 PVC

48.4

49.4

 Polypropylene

41.8

42.7

 Synthetic Rubber

43.1

33.6

 Ammonia (Gaseous)

501.0

474.0

 Ammonia (Liquid)

15.8

16.2

 Pesticides

8.4

3.8

 Nitric Acid

410.0

440.0

Nitrogen Fertilisers

353.0

349.0

Phosphate Fertilisers

83.9

76.3

Potassium Fertilisers

80.6

68.5

Ethylene exports from the Czech Republic have restarted in recent months, although in relatively modest volumes.  In other areas of trade, Czech exports of plasticizers totalled 30,836 tons in 2016 against 25,503 tons in 2015, whilst phthalic anhydride dropped to 14,932 tons in 2016 against 16,089 tons.  Spolana exported 39,377 tons of caprolactam against 42,898 tons in 2015. 

HIP Petrohemija

At the end of March Serbia invited expressions of interest in the privatisation of MSK Kikinda, HIP Petrohemija and chemical fertiliser producer HIP Azotara Pancevo.  Potential investors will be able to submit their letters of interest to the economy ministry by 3 May.  After analysing the asset value of the three companies, their strategic importance for the country and the content of the submitted letters of interest, the economy ministry will pick the best privatisation model.

HIP Petrohemija owns petrochemical plants in Pancevo, Elemir and Crepaja.  The company specialises in the production of high- and low-density polyethylene and other petrochemical products.  The Serbian government owns 54.89% of HIP Petrohemija's share capital, while NIS controls 12.72%. 

Rompetrol Rafinare considering petrochemical investsment

The investment plan of KMG International (Rompetrol group) includes the opening of a new petrochemical unit.  Given that the global commercial and financial results were very good this year, KMG is considering investments in the refining and petrochemical sectors.  In particular, the group is considering HDPE production. 

Rompetrol Rafinare recorded a consolidated operational EBITDA of $182.5 million in 2016, up by 62% on 2015 but the net consolidated profit in 2016 dropped by 23% to $49.8 million.  The operational results achieved records for the Petromidia and Vega refineries following the upgrade of production installations.  In 2016, the Petromidia refinery 5.4 million tpa, 9% up on 2015.  Propylene production at Petromidia’s refinery totalled 125,000 tons in 2016, whilst MTBE production totalled 41,000 tons.  Rompetrol Rafinare exported 2.5 million tons of refinery and petrochemical products in 2016, up by 3.7% over 2015, and shipped mainly to the partners from the Black Sea region.

Polymer processing for Rompetrol Rafinare rose 5% in 2016 to 149,524 tons.  The company is the sole producer of polypropylene and LDPE in Romania, and whilst producing most of its own propylene it remains 100% dependent on ethylene imports for polyethylene production. 

Chinese group CEFC China Energy Company Limited is expected to be able to complete the acquisition of a 51% stake in the Rompetrol Group by June this year.  KazMunaiGaz will keep the stake of 49% in the company, which has most of its business located in Romania.  The deal is pending approval by local authorities and the EU.

Oltchim sale delayed to March

Companies that are interested in acquiring one of the nine asset packages of Oltchim can submit their binding offers until 26 June.  The plan to reorganize the company was approved in a meeting of the creditors held at the beginning of March.  The nine asset packages have a total market value of €293.7 million, and the starting price will be €307 million.

The potential buyers of Oltchim need to pay compensation wages to all the employees who will be laid off, according to AT Kearney.  If they decide to keep a part of the current employees, they can get a bonus of €5,000 for each employee.  However, they can keep maximum 50% of the current number 6of employees.

The Romanian state put up for sale of nine asset packages in Oltchim in 2016.  Although previous efforts to sell Oltchim have proved unsuccessful, the renewed performance of the chemical company in the past two years gives hope that this is a plant possesses a future.  The bidders that move to the second stage will be able to carry out a due-diligence process in February, according to a document drafted by AT Kearney Management Consulting.

Spolana seeking extension on mercury plant

Spolana wants to delay its statutory termination on its mercury plant for another five months until the end of November 2017.  The company has recently requested an extension of the integrated permit until the end of November, for an additional five months.  The reason for the request is necessary to ensure the operation until such time as a replacement technology started production of PVC from the externally supplied raw materials.

The Neratovice plant is permitted to run on mercury until the summer.  Options in the short term are limited to importing chlorine, but a decision on the extension until November may be available by the end of April. 

Methanol & derivative markets

Czech methanol imports totalled 89,600 tons in 2016 against 91,300 tons in 2015.  Russia supplied 42,000 tons in January to December 2016 against 51,500 tons in 2015, whilst Germany reduced shipments from 38,500 tons to 36,000 tons.  A new supplier in 2016 was found in Serbia where MSK Kikinda restarted methanol production in late 2015 after four years of non-activity.  After reaching agreement with Gazprom Neft on a lower price of gas, accordingly at $220 per thousand cubic metres, production was restarted by MSK in late 2015. 

On 22 February 2017 Serbia's government stated that it plans to maintain its strategic partnership with Gazprom Neft, which should ensure raw material supply continuity for MSK Kikinda.

Polish Tyre Production

 (unit-thousand pieces)

Sector

Jan-Dec 16

Jan-Dec 15

Car Tyres

31,550.0

31,006.0

Bus and truck Tyres

4,084.0

4,369.0

Tractor tyres

295.6

286.9

Total

35,929.6

35,661.9

Polish Tyre Production

(unit-kilo tons)

 Sector

Jan-Dec 16

Jan-Dec 15

Car Tyres

274.9

266.3

Bus and truck Tyres

200.1

199.1

Tractor tyres

27.9

27.1

Total

502.8

492.6

MSK established a target at the start of 2016 to produce 129,000 tons of methanol and 95,000 tons of acetic acid.  Production allowed MSK to export 104,691 tons in the first eleven months in 2016 against 5,175 tons in 2015.  MSK undertook a shutdown in September last year which ran until November.  MSK also exported 61,434 tons of acetic acid in the first eleven months in 2016, some of which went to Poland.  In the Polish domestic market, acetic acid is used by PCC Rokita for neutralizing non-ionic surfactants and for monochloroacetic acid production.  PKN Orlen uses acetic acid in the production of PTA. 

Synthos-Michelin

Synthos and Michelin have extended a nearly decade-old licensing agreement that will allow Synthos to increase capacity at Kralupy.  This involves the expansion of capacity for neodymium polybutadiene rubber (Nd BR rubber) from 65 % to 132,000 tpa. 

Central European tyre market

The Hungarian tyre market is seen expanding by around 9% up to 2021, chiefly boosted by continuously expanding automobile production and fleet size.  Growing demand for tyres and the increasing vehicle fleet in the country is anticipated to encourage new flagship tyre manufacturers to enter the country in order to capitalize on the bolstering demand for tyres in Hungary.  Among prominent tyre manufacturing companies with a strong presence in the country are Michelin, Hankook, Continental, Goodyear and Bridgestone.

Hungary’s strategic geographical location in Central Europe, and supportive investment policies, has made the country a prominent investment destination for various automotive companies.

In the Czech Republic Hanwha Corp. recently clinched an order for a logistics automation facility project of about 90 billion won ($81 million) from Nexen tyre.  The Nexen Tire Czech factory is located at Zatec, 70 km northwest of Prague and will serve as a base for its tyre production in Europe.  Hanwha Corp. will supply general engineering services to perform detailed design, purchase and construction simultaneously by building an automation system for the entire process.

Grupa Azoty-coal energy projects

Grupa Azoty Pulawy has selected coal for its new power plant rather than gas.  The new unit 90MWe / 240MWt with modernized factory and power plant will provide energy system tailored to the real needs of the company for the production of electricity and process heat (and this heat surplus to the needs of the city).  Emissions of CO2 will be lower than in a situation assumed from gas and steam.  

At the end of March Azoty Pulawy confirmed the decision to abandon the construction of gas-steam block with a capacity of 400 MWe.  Azoty Kedzierzyn is also in the process of completing analysis on the possible construction of a coal gasification plant at Kedzierzyn-Kozle.  The investment decision will depend on the economics of the project, and is crucial not only for Grupa Azoty’s new products and raw materials, but also the Polish mines in finding a major customer for several million tons of coal per annum.  The main problem is finance as the project value of zl 2.4-2.5 billion represents a major investment for Grupa Azoty. 

Grupa Azoty ZAK

On 1 January 2017 Grupa Azoty ZAK became a full member of the European Council Plasticisers and Intermediate (ECPI), associating been six major producers representing this division of the industry in Europe.

Grupa Azoty ZAK has helped create Application Centre for OXO and Polymers, in order to develop and promote a model of effective cooperation between science and industry.  Other members of the consortium include Ergis SA, SILEKOL, the University of Silesia, Opole University of Technology, Institute of Biopolymers and Chemical Fibres and the Institute of Heavy Organic Synthesis Blachownia.

The objective involves the research and their possible application in the field of specialty chemicals, in particular plasticisers and polymers and defining directions of research and development and innovation in the field of application of products from the area of specialty chemicals in selected business areas. 

The consortium will provide a platform for exchange of knowledge and experience to actively seek innovation in the sector of specialty chemicals through research and product development and technologies with high added value, and also by recognizing the needs of customers in terms of products, in technology and business. 

National Centre for Research and Development awarded project financing to Grupa Azoty worth zl 23 million for the development of manufacturing technology for specialty esters.  Under the project, the company will conduct a series of advanced research and development, which have resulted in obtaining a wide range of non-phthalate molecular weight plasticisers and innovative polyester plasticizers.  The project for which the grant will cover the implementation of the development work on the pilot line, which -will be implemented new technology in semi-industrial scale, enabling the production of a batch of prototype of new products. 

The result, obtained in the perspective of three years from the completion of the above, will begin production on an industrial scale.  One of the advantages of the new plasticizers are beneficial properties include much lower volatility and a positive influence on the strength properties of the material.  The project will be carried out by the Grupa Azoty ZAK SA in cooperation with the Institute of Industrial Chemistry in Warsaw.  NCBiR funding has been granted in the framework of the Pilot Line Operational Programme Intelligent Development 2014-2020.

In the last few months Air Products and Grupa Azoty ZAK signed a long-term contract for the delivery of oxygen and nitrogen.  The agreement will remain valid until the end of 2035 and extends cooperation between the companies which dates back to 1997.  Under the contract, Air Products will provide oxygen and nitrogen gas to the Kedzierzyn plant, as well as liquid oxygen and nitrogen to other customers in Poland.  The project will be based on an upgraded Air Products' production facility which, with a capacity of approximately 2,000 tons per day.  Industrial gases supplied by Air Products are used by Grupa Azoty ZAK for the production of ammonia, oxo alcohols and in auxiliary processes. 

 

 

RUSSIA

Russian Chemical Production (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Caustic Soda

1,134.0

1,115.0

Soda Ash

3,050.9

3,084.0

Ethylene

2,689.7

2,642.0

Benzene

1,240.8

1,215.0

Xylenes

568.5

548.0

Styrene

682.7

674.5

Phenol

222.2

244.2

Ammonia

16,100.4

15,200.0

Nitrogen Fertilisers

9,517.0

8,648.0

Phosphate Fertilisers

3,473.0

3,219.0

Potash Fertilisers

7,729.0

8,056.0

Plastics in Bulk

7,735.0

7,222.0

Polyethylene

2,104.0

1,786.0

Polystyrene

537.3

536.0

PVC

824.6

847.0

Polypropylene

1,363.2

1,331.0

Polyamide

155.5

145.0

Synthetic Rubber

1,488.7

1,442.0

Synthetic Fibres

138.1

128.1

Russian chemical production 2016

Russian chemical industry financial results for 2016 were heavily influenced by the weakness of the rouble where some companies could report excellent profits and others reduced losses against 2015.  Overall the results were not as good as in 2015 when there was a clear advantage to producers from trading both on export and domestic markets based on the weak rouble.  The situation in 2016 became more complex as the negative effects of the weak rouble filtered through to production costs, which in numerous cases could not be passed on to the end-user. 

Domestic demand is rising in some segments of the chemical industry, but the trend is not seen across the board.  The chemical industry is being held back to some extent by the lack of foreign involvement in the major producers, which would open new doors and accelerate progress.  Of course this is not feasible under the current system of governance in Russia, which puts off many would-be investors. 

The Russian trade deficit in chemical industry products has narrowed in recent years as the weak economy has impacted on imports. 

Logistics

Krasny Sormovo Shipyard has signed an agreement with the company BF Tanker for the construction of five chemical tankers.  In 2017, the company plans to build and transfer to the customer three chemical tankers RST27M project.  The other two vessels will be commissioned in the first half of 2018.  Chemical tanker RST27M project designed for the transport of oil and oil products and liquid chemicals in bulk. 

Siberia & Russian Far East

Petrochina-Power of Siberia

The Chinese oil company PetroChina intends to spend $3.2 billion in 2017 on the construction of the eastern route of the gas pipeline Power of Siberia and the second China-Russia oil pipeline, which extends from the outlet of the pipeline Eastern Siberia-Pacific Ocean (ESPO). 

It is expected that capital expenditures for pipelines in 2017 will amount to 22.2 billion yuan ($3.2 billion), which will be mainly focused on the construction of key oil and gas pipeline routes, such as the fourth pipeline Shaanxi-Beijing, eastern route Power of Siberia and the second Sino-Russian oil pipeline.  Under the contract signed in 2014 between Gazprom and China's CNPC, on the eastern route will supply 38 billion cubic meters.  meters of gas per year for 30 years.  The first deliveries could begin in 2019. 

VNKH road access

A 15 km road is under construction between the VNKH site at Nakhodka and Novolitovsk closer in land in the Primorsky Kray and linking with the federal highway A-188.  Construction is being carried out under TOR Petrochemical where the VNKH complex is being built in the Elizarova area of the Partizansk district.  The petrochemical project includes plans to produce monoethylene glycol, polyethylene, polypropylene, in addition to aromatic hydrocarbons and ethylbenzene. 

The Eastern Petrochemical Complex (VNKH) will be able to produce more than 100,000 tons of motor fuel per month.  One of the several large-scale tasks aims to ensure the growing needs of the regions of the Far East in high-quality motor fuel.  The second task is to replace the export of raw materials to the production of goods with high added value.

 

The establishment of TOR Petrochemical based VNHK will give an additional impetus to the development of the regional economy, and will contribute to the creation of processing industries in the Far East.  The cluster approach will allow to develop a petrochemical cluster, where the products will be produced with considerable added value.  The growing demand for petrochemical products in the Asia-Pacific region offers good opportunities for Russia in this direction.

It is expected that the related industries will be developed near the petrochemical cluster - the construction, energy, transportation, manufacturing of plastic products, co-production, which will open up broad prospects for small and medium-sized businesses.

The project cost will amount to 662.7 billion roubles.  The first phase of the project includes a refinery with a planned capacity of 12 million tpa of oil, which is scheduled for completion by 2020.  The second phase comprises the petrochemical complex should be completed by 2022.

Around the complex, as the vice-governor noted, a petrochemical cluster will develop where products with significant added value will be produced.  The growing demand for petrochemical products in the APR opens up good opportunities for Russia in theory.  Adjacent to the petrochemical cluster will be housed related industries such as construction, energy, transport, production of plastic products, related industries, which will open up broad prospects for small and medium-sized businesses.  Once again this is the theoretical approach.

As raw materials, oil will flow through the East Siberia-Pacific Ocean pipeline (ESPO), and most of the products are expected to be exported to the countries of the Asia-Pacific region.  The cost of the project will be 662.7 billion roubles and production is aimed to start in 2022-2023. 

The first stage of the project is an oil refining complex with a planned capacity of 12 million tons of oil per year, which is planned to be built by 2020.  The second stage - the petrochemical complex - should be completed by 2022.

Gazprom-VNKH

Gazprom is ready to build the necessary transportation capacity to connect VNHK, which may be completed even earlier than the plant will be built.  Previously VNHK’s demand for natural gas was estimated at 4.5 billion cubic metres per annum.   Initially Rosneft planned to supply the gas to VNHK from Sakhalin-1 but changed its plans by contacting the Ministry of Energy and Gazprom. 

In March, Rosneft has sent for approval to the government's financial and economic model of the project VNHK. According to some data, it will launch two lines of the total production capacity of 12 million tons of oil and petrochemical raw materials - 3.4 million tons. expansion of production would be dependent on market conditions.

Until that time, it was reported that the Eastern Petrochemical Company, will produce 1.6 million tons of petrol, 800,000 tons of jet fuel, 6 million tons of diesel fuel, 600,000 tons of coke, 2.2 million tons of naphtha and 400,000 tpa of liquefied hydrocarbon gases. In 2020 it was planned to start production of oil products in 2022 - start production of 900,000 tpa of polyethylene, 700,000 tpa of polypropylene and 700,000 tpa of monoethylene glycol.

Gazprom selects Chinese company for Amur GPP

Gazprom has selected China Petroleum Engineering & Construction Corporation (SRESS affiliated with CNPC) to participate in the construction of the Amur Gas Processing Plant (GPP) for the EPC-contract terms.  The contract between NIPIGas (general contractor performs construction management Amur ILI) and SRESS will be signed in the near future.

Under the contract with SRESS, the Chinese company will design, will be responsible for manufacturing and supply of equipment and construction of compressor stations, drying installations and gas purification, gas fractionation.  One of the prerequisites of cooperation is to attract Russian manufacturers of compressor equipment, and automation systems to work.

As an EPCM-contractor of the project was previously selected NIPIGas.  The company carries out the design, coordination, supply of equipment and materials is responsible for construction management and give the plant in a state of mechanical readiness to the customer.

Another project contractor is Linde, which were signed binding documents for engineering and supply of equipment for installations of cryogenic gas separation and liquefaction of helium for all five phases of the Amur GPP.  The separation of ethane and installation wide fraction of light hydrocarbons (propane, butane, pentane, hexane) to be built within the first phase, nitric installation, installation helium concentrate preparation and manufacture of helium.

River terminal-Amur Gas Processing Plant

A river terminal for the construction of the Amur Gas Processing Plant (GPP) has been established on the Zeya River in the Amur Oblast where cargo turnover will amount to 32,000 tpa.  The terminal will facilitate the transportation of large equipment and some construction materials for the construction of the Amur GPP for Gazprom and for SIBUR.  Currently, the Zeya River near future the company is built a pier and cargo space.  Construction is scheduled for completion in 2017.

The builders have to build bridges across the river Big Pera and overpass over the highway.  In addition, it will be necessary to build railways uncommon length of about 45 km and two stations.  The volume of traffic to address the future of the enterprise may exceed 2 million tpa. 

Amur refinery-feedstocks

Investors of the project of construction of the Amur refinery is half solved the problem of raw material supply, bought two small oil companies in Yakutia and the Irkutsk region.  The volume of production could meet half of the refinery needs, which is up to 3 million tpa of oil.  Amur Energy Company, organiser of the project, has discussed with Transneft the ability to connect the Amur refinery capacity for the primary processing of 6 million tpa by the main oil pipeline ESPO.  Transneft has refused to supply the Amur refinery as it states it has other commitments. 

The first phase of construction of the Amur refinery is scheduled for completion in 2017, and for the first products to be shipped in y in 2019.  Amur Energy Company intends to sell around 25% of production to the Russian market, with the largest share being exported to China and other countries in the region. 

ZapSibNeftekhim

The design of ZapSibNeftekhim had attained 86.6% of project schedule by the end of February 2017.  Other details of the project included the supply of equipment and materials at 57.8%.  Installation pyrolysis 44%, polyethylene 30%, polypropylene 33% and the logistics platform 10%.  ZapSibNeftekhim will be part of the Tobolsk industrial platform that combines already running production of monomers and polymers. 

Russian Petrochemical Projects

Gazprom neftekhim Salavat

Gazprom neftekhim Salavat is implementing a project to increase the reliability of the steam supply from Novo-Salavat CHP to existing and new production facilities, including the complex of acrylates.  The Novo-Salavat CHP is the main source of heat and electricity STS for Gazprom neftekhim Salavat and has operated by since 2008.  The volume of consumption is around 160-170 MW.  The main fuel for the plant is natural gas. 

Gazprom neftekhim Salavat-ethylene raw materials

Gazprom neftekhim Salavat expects to increase the volume of deliveries of Surgut gas condensate in 2017 from the Achimov reservoirs.  The refining capacity of Gazprom neftekhim Salavat is 10 million tpa, set up originally for processing of heavy crudes.  The refinery has since been upgraded to process West Siberian oil and gas condensate from the Karachaganak field in Kazakhstan.  The company does not plan to give up oil completely, but will increase usage of gas condensates. 

Ethylene production at Salavat totalled 340,000 tons in 2016, and ammonia 570,000 tons.  Polymer production rose by 18,000 tons over 2015.  Gazprom neftekhim Salavat processed 4.4 million tons of gas condensate in 2016 and 2.6 million tons of oil.  The changes in 2016 meant that the higher condensate purchases reduced the monthly volume of oil production from 200,000 tons to 60-70,000 tons.  Last year Gazprom neftekhim Salavat completed construction of the complex for acrylic acid and acrylates, in addition to an isomerisation unit for pentane-hexane fraction, and the installation of a sulphide-neutralizing alkaline waste.  Continued construction took place for the catalytic cracking unit, hydrogen production plants, and processing propane-propylene fractions. 

Kazanorgsintez ethane supply & ethylene project

The ethane feedstock deficit is now estimated at 120-150,000 tpa.  Tatneft supplied 187,000 tons of ethane from the Minnibayevo gas processing plant to Kazanorgsintez in 2016 for ethylene production, 16,700 tons up on 2015.  Tatneft supplies around 30% of ethane requirements for Kazanorgsintez, supplementing the main source of supply from Gazprom’s Orenburg gas processing plant.  Kazanorgsintez wants to construct a new cracker based on a proposed gas processing plant with a capacity of processing up to 27 billion cubic metres of gas per annum.  This would yield 2 million tpa of ethane, and more than 800,000 tpa of hydrocarbons and natural gas liquids.  Construction is expected to a new complex for the production of ethylene and ethylene derivatives.

In 2015, Kazanorgsintez launched into operation a two-chamber furnace pyrolysis under a contract with Technip.  The installation is designed to produce 138,000 tpa.  With the commissioning of the new kiln total ethylene production capacity has increased to 605,000 tpa, taking into account the decommissioning of obsolete equipment.

In October 2016 it was announced that Kazanorgsintez and Technip signed an EP-contract for the reconstruction of the production of ethylene.  Technip will be responsible for engineering and supply of three pyrolysis furnaces operating on licensed SMK ™ technology.  Project support will provide Technip office in Zoetermeer (The Netherlands).  It will also be responsible for the commissioning of the equipment, which is scheduled for 2018. 

Undertaking these projects will allow for the expansion of the ethylene capacity to 1 million tpa.  Producing its own benzene will allow Kazanorgsintez to reduce costs in the production of cumene through to polycarbonate. 

 

 

Russian feedstocks & petrochemicals

SIBUR-associated & natural gas prices

Prices for associated gas, are not regulated by the Russian Government., whilst there is also no benchmark market price for associated gas.  Prices at which SIBUR purchases associated gas from oil companies are negotiated on a case-by-case basis.  As a %age of total feedstock and materials costs, associated gas accounted for 27.0% and 26.7% in 2016 and 2015 respectively.  As a %age of total feedstock and materials costs, NGLs accounted for 31.7% and 33.3% in 2016 and 2015, respectively.

SIBUR purchases associated gas and NGLs from major oil and gas companies in West Siberia, including Rosneft, Gazprom Neft, RussNeft, Lukoil, Novatek and Gazprom, primarily under long-term contracts.  Rosneft remains the major associated gas supplier with 70.8% share in SIBUR’s total associated gas supplies i volume terms in 2016.

Russian Ethylene Production (unit-kilo tons)

Tobolsk-Neftekhim 2016Producer

Jan-Dec 16

Jan-Dec 15

Angarsk Polymer Plant

122.1

181.4

Kazanorgsintez

477.7

538.5

Stavrolen

278.7

210.7

Nizhnekamskneftekhim

607.6

585.7

Novokuibyshevsk Petrochemical

62.7

67.9

Gazprom n Salavat

340.0

285.8

SIBUR-Kstovo

369.0

328.3

SIBUR-Khimprom

70.9

51.2

Tomskneftekhim

235.3

255.4

Ufaorgsintez

125.7

137.1

Total

2689.7

2642.0

SIBUR and Gazprom Neft jointly operate Yuzhno-Priobskiy Gas Processing Plant (Yuzhno-Priobskiy GPP) with associated gas processing capacity of 900 million cubic metres per annum, each owning 50%.  Gazprom Neft supplies associated gas to the plant for processing into NGL and natural gas.  SIBUR pays for 50% of the total associated gas volumes supplied to the plant, while the remaining 50% is processed for Gazprom Neft.  SIBUR works with all the largest oil and gas producers in West Siberia with the view of extending tenors of the existing agreements and/or entering into new long-term supply contracts on both associated gas and NGLs supplies. 

SIBUR Tobolsk increased commodity output by 13% in 2016.  Volumes production of natural gas liquids (NGL) increased by 7.6%.  During the year the complex produced 5.56 million tons of marketable products, of which 3.42 million tons accounted for liquefied petroleum gases (LPG).  NGL production volumes up to 7.1 million tons, including the volume of processing agreements with Novatek.

Growth in output at Tobolsk has been fascinated by the completed expansion of the gas fractionating plant to 8 million tpa of NGLs.

 MTBE production amounted to 156,500 tons in 2016, whilst polypropylene production increased by 22% to 462,600 tons.  Capacities .at SIBUR Tobolsk include the central gas fractionating plant, the production of liquefied petroleum gas, butadiene, isobutylene, and MTBE and polypropylene production capacity of 500,000 tpa. 

Lukoil 2016

Lukoil increased production of petrochemical products by 18.4% in 2016 to 1.27 million tons of petrochemical products at plants in Russia and abroad.  Foreign assets accounted for 375,000 tons of petrochemical products, which is 3.1% less than in 2015.  Inside Russia Lukoil produced 895,000 tons of chemicals which is 30.5% more than in 2015.  This high growth was due mostly to revived operations at Stavrolen.  Lukoil is exploring the use of polyacrylamide in chemical EOR technologies, which could mean increased usage of acrylonitrile for domestic consumption.  The company possesses acrylonitrile production capacity of 150,000 tpa and sodium cyanide capacity of 48,000 tpa. 

Russian petrochemical producers & markets

Russian olefin production 2016

Ethylene production declined by 11% in February to 238,400 tons.  Ufaorgsintez reduced its output by 14% to 9,000 tons whilst Stavrolen reduced monomer production by 15% to 23,900 tons.  Angarsk Polymer Plant increased production by 13% to 17,000 tons whilst Gazprom neftekhim Salavat increased output by 16% to 27,100 tons.  For the first two months in 2017 Russia produced 505,600 tons which is 6% than in the same period in 2016.

Russian ethylene merchant sales

Tomskneftekhim purchased 31,660 tons of NGLs in March, 2.2 fold up on February, whilst SIBUR-Kstovo and Nizhnekamskneftekhim also increased the consumption to 17,820 tons (12,160 tons in February) and 13,120 tons (6,930 tons) respectively.

Russian propylene merchant sales 2016

Russian sales of propylene on the domestic market totalled 418,000 tons against 398,000 tons in 2015.  Saratovorgsintez remained the largest buyer in 2016 in the Russian merchant market for propylene.  SIBUR-Khimprom, which uses propylene for oxo-alcohol production, is the second largest buyer in the Russian market.  Propylene production totalled 1.5 million tons in 2016, 13% less than in 2015. 

Other buyers of merchant propylene include Akrilat at Dzerzhinsk, for the production of acrylates, Samaraorgsintez for cumene, and the Plant of Synthetic Alcohol which uses propylene for the production of isopropanol. 

Russian Propylene Domestic Sales

(unit-kilo tons)

Producer

Jan-17

Jan-16

Angarsk Polymer Plant

7.7

1.9

Omsk Kaucuk

1.0

0.0

SIBUR-Kstovo

6.3

10.2

Akrilat

0.0

0.0

LUKoil-NNOS

22.6

19.6

Tomskneftekhim

0.0

0.0

Gazprom neftekhim Salavat

0.0

0.2

Nizhnekamskneftekhim

0.0

0.0

SIBUR-Khimprom

0.0

0.0

Stavrolen

2.0

0.0

Tobolsk-Polymer

0.0

0.0

Ufaorgsintez

0.0

0.0

Total

39.6

31.9

Russian propylene sales, Jan 2017

Slavneft-Yanos underwent maintenance in March and the first ten days of April, and thus propane-propylene fraction sales were not available.  In recent months, the Slavneft-Yanos fractions (were shipped to largely to and NPP Neftekhimya. 

Propylene sales were affected in March by the maintenance outage at Saratovorgsintez, allowing more product for export.  Kazanorgsintez also began repairs on 13 April on the pyrolysis unit.

Russian styrene, Jan-Mar 2017

Production volumes for styrene totalled 682,700 tons in 2016 against 674,600 tons in 2015.  Gazprom neftekhim Salavat increased production from 150,200 tons to 177,700 tons, whilst Angarsk reduced production from 49,100 tons to 23,300 tons. 

In March, Russian enterprises sold 13.44 thousand tons of orthoxylene on the domestic market. This is 42% more than in February this year, and 15% higher than in March 2016. The maximum volumes of orthoxylene were supplied to consumers in March 2017 by the Omsk Refinery - 6.32 thousand tons (47% of the total Russian volume of shipments). The company Ufaneftekhim delivered 4.54 thousand tons (34%), and Kirishinefteorgsintez - 2.58 thousand tons (19%).

 

   The largest consumer of orthoxylene in Russia, Kamteks-Khimprom, which uses it in the production of phthalic anhydride, increased purchases of raw materials in March compared to February by 38%, to 5.83 tons (43% of total Russian consumption). The second FA producer, Gazprom Neftekhim Salavat, in March reduced the volume of purchased raw materials by only 1%, to 1.08 thousand tons (8%). Dmitrievsky Chemical Plant increased purchases of orthoxylene almost twice, to 1.51 thousand tons (11%). In addition, Russian manufacturers of paint and varnish materials increased purchases of orthoxylene in March by 34%, to 3.09 thousand tons (23% of total Russian consumption). Producers of fuel, agrochemicals, pharmaceuticals and other products purchased 1.93 thousand tons (14%), according to preliminary data of the Him-Courier, in March, Russian enterprises increased the supply of styrene to the country's market by 54%, to 9.83 thousand tons, Tons. The main supplier of the monomer is Gazprom neftekhim Salavat. By the end of the month, the company sold 4.68 thousand tons of product (47.6% of the total) in the domestic market, or 2.4 times more than in February. Besides, SIBUR-Khimprom shipped 4.28 thousand tons of styrene (1.6 times more than in February), Angarsk polymer plant - 871 tons (1.9 times less). The decrease in the supply of monomer by a subsidiary of Rosneft is due to an increase in the volume of export of the product. For the I quarter of 2017, 22.75 thousand tons of styrene was sold on the Russian market, or 4% more than in the same period of 2016.

 

 

Bulk Polymers

Russian Polyethylene Production (unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Angarsk Polymer Plant

50.4

64.6

Kazanorgsintez

639.6

653.5

Stavrolen

256.4

185.3

Nizhnekamskneftekhim

209.1

198.1

Gazprom n Salavat

146.9

133.3

Tomskneftekhim

192.3

253.9

Ufaorgsintez

108.8

96.3

Total

1603.5

1585.0

Russian polyethylene, Jan-Dec 2016

Domestic enterprises increased the production of polyethylene by 4% for the first two months of the year to 295,500 tons, including 144,300 tons in February.  LDPE production amounted to 117,300 tons in January to February 2017, 9.3% up, whilst HDPE production rose 154,800 tons against 163,000 tons in the same period in 2016.  LLDPE production at Nizhnekamskneftekhim rose 55% to 23,300 tons. 

Stavrolen (petrochemical assets of LUKOIL) has stopped production of polyolefins for scheduled maintenance.  At the end of last week Stavrolen stopped job production of low density polyethylene and polypropylene. Repair work to be completed in 10 days.

 

Previous visits polyolefins production stopped for repairs in December 2016. Simple power was short-lived and lasted several days.

 

Stavrolen specializes in the production of olefins and polyolefins. Every year the company is able to process 900,000 tons’ pyrolysis feedstock, releasing on its basis benzene (80,000 tons per year), vinyl acetate (50 thousand. T), polypropylene (120,000 tons), low density polyethylene (300,000 tons).

 

According to the MRC, the first two months of this year, the company produced 40.1,000 tons of polyethylene and 19,600 tons of polypropylene.

Russian polypropylene, Jan-2017

Russian Polypropylene Production

(unit-kilo tons) 

Producer

Jan-17

Jan-16

Ufaorgsintez

10.8

10.0

Stavrolen

9.5

9.2

Moscow NPZ

9.6

10.0

Nizhnekamskneftekhim

18.4

18.8

Polyom

18.6

17.8

Tomskneftekhim

12.0

10.0

Tobolsk-Polymer

43.2

43.2

Total

122.1

119.0

Russian polypropylene production amounted to 122,100 tons in 2016 against 119,000 tons in January 2016 and 126,500 tons in December 2016.  Tobolsk-Polymer produced 43,200 tons against 48,000 tons in December, whilst for the whole of 2016 the company produced 463,500 tons. 

Nizhnekamskneftekhim was the second largest producer in 2016, producing 216,700 tons, and produced 18,400 tons in January.  Polyom at Omsk produced 18,600 tons in January against 17,300 tons in December; for the whole of 2016 the company produced 202,800 tons.

Ufaorgsintez produced 10,800 tons in January against 11,400 tons in December, and 123,100 tons for the whole of 2016.  Stavrolen produced 9,500 tons of polypropylene in January against 9,200 tons in December, and 112,400 tons for 2016.  Neftekhimya at the Moscow refinery reduced production in January to 9,600 tons from 11,300 tons in December, whilst producing 129,400 tons in 2016.  Polypropylene imports into Russia amounted to 9,500 tons in January, 14% down against January 2016.  Overall, imports amounted to 167,200 tons in 2016.

Russian PVC market, Jan-2017

Russian PVC Production (unit-kilo tons

Producer

Jan-17

Jan-16

Bashkir Soda

22.7

22.4

Kaustik

8.1

8.2

RusVinyl

25.3

23.5

Sayanskkhimplast

23.0

21.7

Total

79.1

75.8

Russian PVC imports dropped 40% in January against January 2016 to 1,200 tons.  The total volume of imports of Chinese acetylene resin rose to 856 tons.  Exports were affected in January by the stronger rouble, thus falling to 11,200 tons against 17,700 tons in December.

RusVinyl increased production of suspension PVC by 28% in 2016 to 282,000 tons and 23,000 tons of emulsion PVC.  Caustic soda production amounted to 200,000 tons in 2016.  Ethylene for RusVinyl is supplied from SIBUR-Kstovo whilst rock salt is delivered by water transport from the Astrakhan region and rail transport from Belarus.  Russian Railways has recently won the tender for the provision of transport and logistics services for RusVinyl, taking responsibility for transport organisation from the station Zeletsino. 

Russian PVC production amounted to 79,100 tons in January against 64,000 tons in December.  RusVinyl produced 25,300 tons of PVC, of which 2,000 tons comprised emulsion grade, whilst Sayanskkhimplast produced 23,000 tons.  In 2016 Sayanskkhimplast produced 142,800 tons of PVC against 208,500 tons in 2015.  Bashkir Soda Company produced 22,700 tons in January unchanged from December.  Production totalled 248,700 tons in 2016.  Kaustik at Volgograd produced 8,000 tons in January against 8,100 tons in December, after producing 88,500 tons in 2016. 

Russian Domestic Polymer Prices (euros per ton)

Product

Dec-16

Nov 16

Average 2016

Polyethylene

1169.5

1191.8

1091.7

Polystyrene

1204.9

1147.5

1139.0

PVC

776.2

819.8

712.8

Epoxy resins

2386.5

2327.4

2096.5

Polypropylene

1183.2

1139.2

1008.6

Silicone polymers

2594.2

2880.3

2615.1

Russian polycarbonate Jan-2017

Kazanorgsintez produced 6,600 tons of polycarbonate in January, 3.5% more than in January last year.  The company continued to increase the proportion of injection moulding grades to 52% compared to 32% in December.  In January 2017, exports totalled a record 3,800 tons against 10,600 tons in January 2016.

 

 

PX-PTA-PET

Russian PX Production (unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Gazprom Neft

136.9

163.9

Ufaneftekhim

122.4

105.6

Kinef, Kirishi

66.6

58.5

Total

325.9

328.0

     

Russian PX Domestic Sales (unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Gazprom Neft

61.6

85.2

Ufaneftekhim

107.5

110.0

Kinef

0.2

0.2

Total

169.3

195.5

     

Russian PX Exports (unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Gazprom Neft

58.9

52.2

Ufaneftekhim

14.0

2.0

Kinef

48.7

58.8

Total

121.6

113.0

Russian paraxylene 2016

Russian paraxylene production totalled 325,900 tons in 2016 against 328,000 tons in 2015.  Paraxylene sales on the domestic market amounted to 169,300 tons against 195,500 tons in 2015 whilst exports rose from 113,000 tons to 121,600 tons.

Russian PET production

PET production in January amounted to 49,100 tons which was 30% up on the same month in 2016.  Exports rose from 740 tons to 2,170 tons in January 2017, whilst imports rose from 3,750 tons to 6,700 tons. 

In 2016, the Russian PET market increased by 17% and totalled 665,000 tons.  Increased demand on the Russian market was covered by an increase of imports and production.  Imports on the Russian market increased by 47% in 2016 and amounted to 121,000 tons.  Exports decreased by 3% and amounted to 28,000 tons. 

Etana PTA projects

Russian-Chinese project to create a production of polyethylene terephthalate (PET) in the Kabardino-Balkaria could be completed by 2030.  The project consists of three sections, the aquifer province polymer complex, the preparation and bottling of bottled water and the transport logistics hub. 

Investment in the project is now estimated at $12.9 billion.   Originally, it was estimated at 12.3 billion roubles.  Currently, the Russian side has fulfilled all its obligations Federal Center has funded 1.5 billion roubles, the country 163 million project is part of the practical implementation stage.

At the start of February 2017, the Kabardino-Balkaria government met with the North Caucasian railway branch of Russian Railways to consider the infrastructure requirements for the Etana PET and PTA projects.  These projects are being implemented by the government of Kabardino-Balkaria together with state corporations of China and includes three sectors, focused on polymer for the production of bottled drinking water and transport and logistics.  The main destination route is intended to be China, both for raw materials and product sales.

The Etana project involves a total capacity of 1.5 million tpa, broken down into stages of 500,000 tpa by 2018 and the remaining 1.0 million tpa by 2020.  Some reports have expressed doubts about the necessity of this project, noting that the entire demand of the Russian market of PET is less than 500,000 tpa.  However, due to Chinese participation in the project most of the production is expected to be targeted on the Chinese market.  The PTA project seems less certain and further news is awaited. 

Russian PTA Imports (unit-kilo tons)

Country

Jan-Dec 16

Jan-Dec 15

Belgium

56.2

30.3

Brazil

6.4

8.2

China

48.5

37.6

South Korea

64.0

66.8

Poland

30.9

8.1

Thailand

3.0

0.0

Portugal

0.0

2.5

UK

0.3

0.0

Total

209.2

153.5

The Chinese partners include China Petroleum Technology and Development Corporation (CPTDC) and China Kunlun Contracting and Engineering Corporation (CKCEC). 

Ivanovo polyester

The construction of the Ivanovo polyester project is set to start in the middle of 2017 despite suggestions that the required environmental report for VEB bank financing was inaccurate.  An independent review of the plant and its side-effects is likely to be undertaken, but in reality may have little effect.  The plant will process a huge amount of highly toxic chemicals which is of concern to the local administration, although the project managers insist that the plant will not emit waste. 

Ivanovo Polyester Complex (IPK) signed a contract on 1 December 2016 with Uhde Inventa-Fischer for the supply of equipment, installation and service for the PET project at Vichuga in the Ivanovo region.  Earlier in 2016 a contract was signed with the Czech company Unistav for working documentation, supply of auxiliary equipment and construction, installation and commissioning works. 

Ivanovo Polyester Complex submitted the documents for state examination in February, which if approved would mean that construction of the new facilities can start in the first half of 2017.  Ivanovo Polyester Complex has already signed agreements for MEG supplies from SIBUR and.  Nizhnekamskneftekhim of around 65,000 tpa.  Import requirements of 155,000 tpa are expected to be met through imports. 

Work on the creation of synthetic fibre plant for several years already underway in the region.  One of the aims is to compete with China in the manufacture of textiles which is only possible through the availability of the country’s own raw material base.  

Under the plan, construction will end in 2019.  The first samples of the product will appear in the same year, as commodity output will begin in 2020.

Following the meeting of Vnesheconombank's Supervisory Board, where the project has received preliminary approval, it is the first written agreement with the State Corporation.  This document states our intention to build a factory, their intention to finance the project, as well as the fact that in April we will sign a loan agreement with VEB and start its implementation.

Loan agreement - 80% of the project cost.  This is the current rate of just over 20 billion roubles, but in the currency, the euro.  The rest of the - the money of shareholders.

Under such lending only a dozen of the largest Russian banks came in principle.  But sales declined for several reasons.  First, our commercial banks had long been engaged in project financing: they only need to secure existing assets, property, etc.  They are interested only in what they can take now, not tomorrow...  Secondly, the project payback period is large enough.  Such long money, they do not dare to invest, for 10-13 years.

It is clear that now is not so much money and VEB.  But since he is also the corporation development, is willing to sign a loan agreement.  Abroad, including in the European Union, there is a program of export credit.  These countries through the state-owned insurance companies insure the transactions related to its products exports of goods and services.  Simply put, the Czech bank enters into a contract with VEB in the amount of the contract with the Czech company, a German bank - on the amount of the contract with the Germans.  Both transactions are insured by state insurance export agencies in those countries.  VEB these amounts have already concluded a credit agreement with us, sends us the money, taking on some risk.

Firstly, we will pay taxes at the place of registration and registered today we are in Ivanovo.  By the time when the start of the enterprise operation, we are thinking to re-register in Vichuga.

A year ago in Prague, we entered into an agreement with the Czech company Unistav Construction as Unistav over 26 years of activity has implemented more than 210 projects in the Czech Republic, Slovakia, Ukraine.  The Russian construction company Unistav Construction works with VEB in 2001.  Among the major projects implemented in our country: thermal insulation work at the plant, Volkswagen in Kaluga, the construction of one of the largest factories for the production of corrugated packaging in Dmitrov Moscow area, the construction of a logistics terminal in Sheremetyevo airport, the plant for the production of pates and canned meat in the Vladimir region, plant Rafarma in the Lipetsk region...

Russia's main partner in the country of the Czechs in the project is the St.  Petersburg company SMU-303.  She also has extensive experience in the construction of large enterprises.  More recently, with the participation of Vnesheconombank built, for example, a factory for the production of oriented strand boards to Torzhok in the Tver region...  There will be other sub-contractors, including those of our region.

The main technological equipment - the German.  In December 2016 in Essen, Germany signed a contract for the supply of equipment, installation and maintenance services to the general contractor Uhde Inventa-Fischer GmbH, which is part of the group ThyssenKrupp Industrial Solutions AG.  The contract provides for the delivery of modern high-tech equipment from leading licensors, Uhde Inventa-Fischer GmbH (Germany) and Oerlikon Neumag (Germany).  Part of the equipment for the auxiliary systems - Czech and Russian.

Ideally, the plant will produce only a polyester fibre.  But it provides and release a certain amount of granulate, from which we can produce textile yarns.  Demand for fibre in Russia anymore.  This is a more expensive product; it is more profitable to sell.  The granulate is, so to speak, an additional product.  The technology is such that synthesis of the polymer without loss of quality is only possible when loading and continuous production of not less than 60%.  On the three lines will produce 14 kinds of polyester fibre.  In transitions from one mode to another shutdowns individual elements of the continuous spinning cannot be avoided.  At this time of the melt granules will go on.

Total in the country now consumes about 200,000 tons of chemical fibre.  In Russia today is produced in a year about 70,000 tons of recycled chemical fibres - from plastic bottles, roughly speaking.  It is of lower quality, and is used only in a mixture with the primary man-made fibre - one that will make us.  Our fibre is quite competitive.  According to analysts, demand for polyester fibre in 2025 will be about 300,000 tons.  We hope that 60% of the demand of the Russian market, our products can provide.

With regard to local processing, it is already in the region, there are companies that can provide it.  In addition, Vichugskaya industrial park, which will be built next to the combine, will become a platform for placing many enterprises for processing PET-fibres and granules.  This is beneficial and quite affordable even for small businesses.

One component - is terephthalic acid, which produces a Siberian-Ural Petrochemical Company in Russia (SIBUR).  However, all her well and she consumes. SIBUR but there are plans to increase the production of acid.  So 70% of our needs.  And so to buy abroad the raw material - no problem.  With a price point of view, work on the imported acid is now profitable, and it is produced in excess.

The second component - a monoethylene glycol.  It is produced including close to us - in Nizhny Novgorod and Dzerzhinsk Nizhnekamsk (Tatarstan).  We with them have preliminary agreements on the supply of the entire volume needs.

The construction of the plant will take part at various times from 500 to 900 people.  Naturally, the general contractor does not bring as many workers, so that there is a case for the locals...  it is necessary for the activities of 550 employees combine.  Require electricians, mechanics, plumbers, labourers, engineers and other specialists of traditional professions that exist in Vichuga, and in the surrounding areas.

Another important question, disturbing local residents, environmental concerns plant.  Whether all necessary examinations passed?

According to the law for such an enterprise necessary to have a sanitary protection zone.  This requirement is satisfied: the site has been selected so that within a kilometre no shelter there, garden plots, too, are at a safe distance.  He was commissioned a report on the impact on the environment (in this case, it is not legally required, but we still did it).  This report was examined by Rosprirodnadzor.  and public discussion of the project have been carried out.  In addition, the project documentation has a section on environmental and industrial safety.  It is compulsory and also successfully passed the test Glavgosekspertizy in Moscow.

Production consists of two steps: creating a polymer and a pull the fibre from it.  In the second stage any harmful side products may not occur in principle: they only apply physical and mechanical processes.  In the first stage of terephthalic acid and monoethylene glycol in a closed environment at high temperature created a polymer (in the form of a melt PET).  When this by-product water is formed only with the solids.  It will be cleaned in the local sewage treatment plant installations using specific microorganisms.  The result is a sludge that can be used as fertilizer.  Further, this treated water will go to municipal treatment facilities.  No discharges into local rivers will not.  Even precipitation (snow and rain water) from the territory of the plant will go into treatment facilities.

All reactions for the production will take place in a closed space (vacuum), without contact with the external environment.  Even if suddenly broken pipe sealing, the production immediately stops automatically, and the melt goes into special containers in the territory of the plant and turn into ingots, which are safe and then, too, can be recycled again.

Even those harmful substances that are in trace amounts may occur when the production process, will afterburning directly at the plant and the atmosphere they will not fall.  Boiler rooms would run on gas, and therefore there are no problems for the environment.

So the impact on the environment will combine the most minimal, it allowed the existing sanitary and other rules.  That is why, by the way, the world is growing every year and the production and consumption of polyester fibres and products from it, because it is the purest of all types of synthetic fibres.

Russian MEG market, Jan-2017

MEG sales on the Russian domestic market amounted to 12,300 tons in January, 7.6% down on December.  SIBUR-Neftekhim supplied 8,860 tons in January, Nizhnekamskneftekhim 3,390 tons, and Kazanorgsintez.  Polief purchased 7,470 tons in January, Obninskorgsintez 2,760 and BaltTechProm 1,200 tons. 

MEG exports from Russia amounted to 9,700 tons in January, 18% up on January 2016 when volumes amounted to 6,910 tons.  SIBUR-Neftekhim shipped 5,430 tons in January 2017 and Nizhnekamskneftekhim 4,200 tons.  Belarus accounted for Russian exports of 7,840 tons.  MEG imports amounted to 4,400 tons in January, 15.4% down on December, all being delivered to TD Ecopolymer.  Saudi Arabia supplied all of the imports.  Regarding Russian MEG prices, domestic and export numbers tend to correlate closely.

 

 

Aromatics

Russian benzene production, Jan-Feb 2017

Russian benzene production amounted to 107,200 tons in February, or 10% less than in January.  Kirishinefteorgsintez reduced the production by 28%, to 4.900 tons whilst Severstal reduced output by 18% to 2,400 tons and to Slavneft-Yanos by 16% to 5,800 tons (-16%).  SIBUR-Kstovo increased benzene production by 13% in February to 7,500 tons.  In the first two months in 2017 Russian benzene production totalled 227,000 tons which was 12% up on the same period in 2016. 

Kazakhstan has started deliveries of crude coal benzene from ArcelorMittal Temirtau to Uralorgsintez.  SIBUR subsidiary Uralorgsintez recycles coal crude product, containing 65-80% of the basic substance, receiving therefrom benzene for synthesis, wherein the concentration of benzene greater than 99%.

Russian Benzene Consumers

(unit-kilo tons)

Consumer

Jan-Mar 17

Jan-Mar 16

Kuibyshevazot

50.3

26.9

Azot Kemerovo

32.3

28.1

Shchekinoazot

13.7

14.7

Kazanorgsintez

16.5

19.8

Zapsib

10.0

13.5

SIBUR-Khimprom

21.0

28.0

Promsintez

3.9

4.4

Uralorgsintez

19.8

20.2

Others

20.1

20.5

Exports

47.2

15.5

Total

234.7

191.7

Nizhnekamskneftekhim intends to increase the production of benzene by 50,000 tpa in 2017 which will allow it to stop buying merchant benzene.  The construction of two new pyrolysis furnaces and installation of benzene extraction of GTC's technology at the ethylene plant, will allow Nizhnekamskneftekhim to increase benzene production.  In 2016 the company produced 212,800 tons of benzene.  In October 2016 Nizhnekamskneftekhim concluded a contract with GTC Technology (USA), which involves the development of the basic design, technical services, the supply of corporate catalyst, solvent and equipment.  Licensed technology GT-BTX® is to be implemented on existing olefins production EP-600 and applied to a new installation, which will process a wide fraction of hydrocarbons.

Shchekinoazot caprolactam modernisation

Shchekinoazot has been undertaking a programme for improving caprolactam production for the past year and the process is close to completion.  However, in the production of cyclohexanone are still bottlenecks that require additional work activities proposed by experts is now also being implemented. 

It is necessary to ensure an increase in the circulation of cyclohexane, which will raise productivity without degrading the achievements of expenditure norms.  Primarily, this reconstruction of internal devices stripper cyclohexane. 

To increase the capacity of caprolactam in the near future will allow the reconstruction of hydroxylamine separation, but only if the construction of a new line of caprolactam distillation.  Events designed for this unit is definitely very expensive, because the decision on their implementation can be expected only after the construction of new production facilities, which are maintained at the site of Shchekinoazot today.

Russian Orthoxylene Domestic Sales

(unit-kilo tons)

Producer

Jan-17

Jan-16

Gazprom Neft

5.7

6.2

Ufaneftekhim

8.1

3.7

Kirishinefteorgsintez

2.6

3.4

Total

16.3

13.3

Russian orthoxylene, Jan-2017

Sales of orthoxylene on the Russian domestic market amounted to 16,660 tons in January, 22% up on December.  Ufaneftekhim supplied 8,190 tons, Gazprom Neft 5,880 tons and Kirishinefteorgsintez 2,600 tons.  Kamteks-Khimprom increased its purchases of raw materials in January compared to December 2016 by 17% to 10,340 tons. 

Gazprom neftekhim Salavat increased its purchase of raw materials by 35%, to 1,340 tons whilst Dmitrievsky Chemical Plant increased its purchases by almost 2.5 times to 690 tons.  In addition, Russian paint producers increased their purchases in January by 25%, to 2,540 tons, whilst fuel manufacturers, agrochemical, pharmaceutical and other products bought 1,760 tons.  Orthoxylene exports dropped to 1,550 tons in January against 7,510 tons in December.  Gazprom Neft supplied 1,390 tons of the total. 

Russian Toluene Domestic Sales (unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Novopiletsk MK

0.3

1.5

Slavneft-Yanos

22.4

26.3

Severstal

7.1

7.0

LUKoil-Perm

27.3

17.9

Gazprom Neft

87.0

47.0

Zapsib

2.9

3.6

Kinef, Kirishi

30.4

28.1

Gazprom Neftekhim Salavat

0.3

0.1

Others

0.0

1.3

Total

177.7

132.8

Russian toluene sales, Jan-2017

Toluene deliveries to the domestic market amounted to 14,970 tons in March, 6% more than in February.   Gazprom Neft- supplied 42% of deliveries from the Omsk Refinery (6,260 tons), Slavneft-Yaroslavnefteorgsintez 29% (4,310 tons), Kirishinefteorgsintez 20% (3,030 tons), Severstal 4% (650 tons), Lukoil-Permnefteorgsintez 3% (480 tons), West- Siberian MK 1% (190 tons), and Novolipetsk MK (0.050 tons).

Buyers in March included explosive manufacturers (1,430 tons), 2.3 times up from February, whilst paint manufacturers increased purchases by 42% to 4,490 tons.  Manufacturers of motor fuels and additives to them reduced purchases of toluene by 29% to 3,600 tons (24%).  In addition, 480 tons of toluene were purchased by companies using it as a solvent for the production of rubbers, 1,710 tons (11%) and manufacturers of other products, and 3,250 tons (22%) are trading companies.  In the first quarter of 2017, 40.960 tons were shipped to the domestic market which is 1% higher than in the same period in 2016. 

Russian phenol, Jan-2017

Russian phenol production amounted to 15,950 tons in February, 5% down on January.  The only domestic producer to increase production of phenol was Ufaorgsintez rising 10% to 5,200 tons.  The maximum reduction in output was noted at the Novokuibyshevsk petrochemical company: dropping 11% to 4,800 tons.  Kazanorgsintez reduced production 10% in February to 5,900 tons. 

Russian Phenol Market Sales by Supplier

(unit-kilo tons)

Producer

Jan-Mar 17

Jan-Mar 16

Novokuibyshevsk PC

12.1

12.4

Kazanorgsintez

3.1

3.1

Ufaorgsintez

13.3

15.9

Borealis

0.1

0.1

Total

28.6

31.6

The largest buyers in January came from domestic manufacturers of phenol-formaldehyde resins, whilst other buyers included domestic producers of alkylphenols (Nizhnekamskneftekhim) and antioxidants (Sterlitamak Petrochemical Plant).  About 40% of the total sold in the Russian phenol market was delivered by trucks. 

 

 

Synthetic Rubber

Russian C4 Purchases (unit-kilo tons)

Consumer

Jan-17

Jan-16

Omsk Kaucuk

4.5

2.2

Nizhnekamskneftekhim

17.1

17.0

Togliattikaucuk

14.8

13.7

Sterlitamak Petrochemical

0.0

0.0

Total

36.5

32.9

Source: Chem-Courier.ru

 

 

Russian C4 sales, Jan 2017

C4 sales on the Russian domestic market amounted to 36,500 tons in January against 32,900 tons in January last year.  The leading suppliers included SIBUR-Kstovo with 8,671 tons, Tomskneftekhim 7,476 tons and Stavrolen 6,594 tons.  Angarsk Polymer Plant increased sales by 25% to 2,700 tons whilst Kazanorgsintez reduced shipment by 19% to 3,700 tons.  The two largest rubber producing plants Nizhnekamskneftekhim and SIBUR Togliatti (Togliattikaucuk) both increased purchases of C4s slightly in January.

Omsk Kaucuk-rubber production

Russian Synthetic Rubber Exports (unit-kilo tons)

Country

2016

2015

Belarus

34.6

37.8

Belgium

19.8

14.3

Brazil

27.9

57.9

Canada

16.5

19.8

China

132.7

94.6

Czech Republic

31.8

28.6

Germany

29.0

24.5

Hungary

71.7

74.8

India

108.7

86.7

Italy

7.0

10.6

Japan

19.9

33.7

Korea South

7.9

9.9

France

2.9

3.0

Lithuania

7.2

12.4

Mexico

31.2

1.4

Poland

131.0

120.1

Portugal

5.2

6.3

Romania

40.4

39.5

Serbia

16.6

14.4

Turkey

36.9

40.2

Ukraine

27.4

17.3

USA

61.8

56.4

Malaysia

3.6

4.9

Vietnam

10.9

12.9

Others

101.5

115.0

Total

984.3

937.0

Omsk Kaucuk (included in Titan) produced 47,000 tons of SKMS rubbers in 2016, increasing its share in Russian production of methyl styrene butadiene rubber from 22% in 2015 to 26%.  Omsk Kaucuk doubled its share of Russian exports of butadiene-methyl styrene rubbers from 7% to 15% in 2016.  Omsk Kaucuk introduced energy-saving technologies in the past five years which has allowed nearly a one-third increase in plant productivity and a 40% reduction in consumption of heat and power resources.  Omsk Kaucuk is currently modernising its plant for the production of butadiene.  The project has included replacement of the heat-exchange equipment, and is expected to be completed in late 2017. 

Efremov Synthetic Rubber Plant 2016

Efremov Synthetic Rubber Plant reduced the net loss in 2016 2.97 times in comparison with 2015 to 77.1 million roubles.  Revenues fell 30.8% to 2.86 billion roubles.  Physical rubber production fell 17% in 2016 to 96,200 tons.  Exports to non-CIS countries rose to 87.7%.

Voronezhsintezkaucuk increased rubber production by 4% in 2016 to 163,000 tons.  The company increased production efficiency, optimized raw material consumption and improved the quality of products since the launch of the production of thermoplastic elastomers (TEP-50).  The company produced 73,300 tons in 2016 with ongoing plans to expand its interaction with regional suppliers and consumers. 

Voronezhsintezkaucuk is the only enterprise in Russia that produces thermoplastic elastomers (TPE).  After the launch, the total capacity of the site was 85 thousand tons per year. The structure of the enterprise includes five manufactures of synthetic rubbers, TEP, monomers and solvents. In Russia, using TEP, more than 20 key sections of federal and regional roads have been built.

Russian carbon black

Russian carbon black production totalled 885,100 tons in 2016 against 822,700 tons in 2015.  One of the largest producers Yaroslavl Technical Carbon Plant produced 322,000 tons of carbon black in 2016, 2.5% higher than in 2015.  Nizhnekamsk Carbon Plant (included in Tatneft) has implemented an energy project which will ensure sufficient heat and electricity for all production departments for Nizhnekamsk Carbon Plant.  Previously the company was required had to buy electricity from Tatenergo before deciding to create its own energy resources.  The project, which began several years ago, has already reached the full return on investment. 

Krasnoyarsk Synthetic Rubber Plant 2016

Krasnoyarsk Synthetic Rubber Plant produced 41,000 tons of butadiene-nitrile rubber in 2016, which is 6% more than in 2015.  The main stimulus for production growth was the promotion of the site's products in China and Russia and entering new markets of Brazil, Vietnam, Colombia, Peru, and Serbia. 

Kurskrezinotekhnika

Kurskrezinotekhnika plans to use 350 million roubles in 2017 for the purchase of new equipment.  This amount will be directed to the acquisition of a line of high pressure hoses, which will develop the production of new products for the Russian market.  This equipment is to be delivered to the company in May and is to be launched in August.  Kurskrezinotekhnika also intends to buy equipment for vulcanizing tape total value of 250 million roubles for introduction by 2018.

In 2016 the company produced products worth 4.4 billion roubles.  The replacement of fixed assets has been invested more than 44 million roubles, the modernization of technological equipment bag production and production of wetsuits.

In October 2016 the launch of a modernized the production of technical fabrics to Kurskrezinotekhnika site. In the first phase of the investment project repair and reconstruction of the industrial site was held, purchased and installed 15 units of equipment, including torsionally can frame and warping machines, 13 weaving machines. For this purpose, it was sent to 217 million roubles.

Further development plan Kurskrezinotekhnika assumes an annual increase in production volumes. In 2017 it is expected to grow by at least 5% compared to 2016. Owners of companies are planning to continue the development of cooperative ties with the Kursk Enterprise RabeksTekstil and OAO Kursk Factory of technical fabrics.

Kurskrezinotekhnika on a par with Saransk plant Rezinotekhnika part of the holding Rubex Group, which was formed in 2013. It specializes in developing, manufacturing and supplying highly specialized rubber products for industrial sectors.

Omsk Kaucuk-latex production

Omsk Kaucuk has recently completed the reconstruction of latex production facilities based on installation of new production equipment.  Production of latexes installed included nine pieces of equipment, comprising six pumps with tight magnetic clutches.  The pump design eliminates the amount of pumped fluid into the environment.  In addition to the environmental impact the reconstruction will reduce electricity consumption by about 20% whilst it will increase the stability and security of the entire process chain. 

Omsk Kaucuk started latex production in 1965, the current capacity stands 13,000 tpa.  Production was halted in 2010 before reconstruction started two years ago. 

 

Russian rubber exports, Jan-Dec 2016

Russian exports of synthetic rubber increased to 984,300 tons in 2016 to 984,300 tons from 937,000 tons in 2015.  The largest category was isoprene rubber which rose from 275,900 tons to 252,700 tons.  China increased its imports of Russian synthetic rubber in 2016 to 132,700 tons against 94,600 tons in 2015, whilst Poland increased shipments from 120,100 tons in 2015 to 131,000 tons in 2016.  The most notable new destination for Russian exports in 2016 was Mexico where volumes totalled 31,400 tons against 1,400 tons in 2015.  The highest value product category exported from Russia is halogenated butyl rubber (HBR). 

Khimprom increases sales of rubber chemicals

Khimprom at Novocheboksarsk increased sales of rubber chemicals by 48% in 2016, helped by exports.  This trend is continuing to grow, for example shipments of diphenylguanidine (DPG), used in the manufacture of tyres amounted to 89 tons in January 2016 but rose to 200 tons in January 2017.  For the whole of 2016 Khimprom sold 1,914 tons of DFG against 1,290 tons in 2015.  Diphenylguanidine is used as vulcanisation accelerator. 

Khimprom-asetonanil

Khimprom (Novocheboksarsk) has completed the first phase of the project to expand the production of Atsetonanil.  The capacity of the plant has been expanded by 25% from 875 tons a month to 1,100 tons.  Investment in the project will amount to 75 million roubles.  Atsetonanil is used as a stabilizer, and slows down the process of aging of tyres.  This helps to protect the product from the thermal aging of rubber increases the resistance to cracking and oxidation.

Rubber used in Russian Tyre Industry

(unit-kilo tons)

Tyre category

Jan-Dec 16

Jan-Dec 15

Car Tyres

41.0

38.0

Lorry tyres

7.5

6.8

Agricultural tyres

1.8

1.4

Total

50.2

46.2

 Russian tyre market

Voronezh Tyre Plant increased tire production by almost 25% in 2016.  The company increased its exports to Europe, North America and the CIS.

Over the past year VSHZ produced 2.2 million tyres, the increase attributed to export supplies.  About 80% of tyres sold in Russia.  Rostec and created a joint venture Pirelli Tyre Russia in 2008.  Now it includes Voronezh Tire Plant and Kirov Tire Plant, which were purchased in 2011 at SIBUR.  By Pirelli reports, in 2014 the Russian tyre band released 7 million tyres in 2015 is expected to increase production to 8 million.

Russian Chemical Commodity Exports

 

Jan-Dec 16

Jan-Dec 16

Jan-Dec 15

Jan-Dec 15

Product

Kilo tons

USD Mil

Kilo tons

USD Mil

Ammonia

3658.6

828

3,585

1,356

Methanol

1497.4

251

1,261

331

Nitrogen Fertilisers

12773.3

2,171

11,594

2,672

Potash

9486.1

1,856

11,185

2,958

Mixed Fertilisers

9241.8

2,608

8,857

3,221

Synthetic Rubber

984.3

1,293

937

1,377

In the period 2012-2014 for the modernization VSHZ it has sent more than 100 million euros, resulting in improved product quality, to master the production of tyres with a diameter of 16 to 21 inches. 

ethanol

Russian methanol market 2016

Russian methanol production fell by 10% in February against January to 318,000 tons.  As predicted by the analysts of Him-Courier, the volume of methanol production in Russia in February decreased relative to the level recorded a month earlier by 10%, to 318,000 tons.  The leader in the volume of the released product is held by the company Metafrax, which accounted for 27% of all methanol produced in February.  The shares of the products of other domestic manufacturers were distributed as follows: Tomet and Sibmetakhim - 21% and 25%, Shchekinoazot and Azot - 10% and 6%, Nevinnomyssk Azot and Akron - 3 % And 2%, and Ammonium enterprises - 5%, respectively.  The only enterprise where the growth of methanol production was observed in February was Ammonium: by the end of the month 16,000 tons were produced here, which exceeds the level fixed in January by 1%.  The maximum reduction in output was recorded at Shchekinoazot: according to the results of February, 32.4,000 tons were produced here, this is 25% less than a month earlier.  Less significantly in February, reduced the production of other domestic companies.  Sibmetakhim and Akron produced 78,500 tons and 7.4,000 tons of methanol, reducing production by 10% each, the company Metafrax - 86.2,000 tons, which is 9% less than in January.  The company Nevinnomyssk Azot for the month produced 10.9,000 tons, reducing output in comparison with January by 8%, and Azot - 18.9,000 tons, which is lower than the volumes produced by the company in January 6%.  The minimum decrease in methanol production in February was demonstrated by the company Tomet: according to the results of the month, 67.3,000 tons were produced here, it is only 3% less than in January 2017.

Russian methanol production totalled 3.647 million tons in 2016 against 3.571 million tons in 2015.  Russian methanol merchant sales are evenly divided between exports and the domestic market.  Russian methanol exports rose in 2016 whilst domestic merchant sales and captive consumption fell.  Shchekinoazot and Metafrax reduced exports to concentrate on internal processing in the formaldehyde sector, whilst Sibmetakhim and Tomet came close to maintaining export volumes. 

Sibmetakhim sells about half of its production on the domestic market, following Metafrax and Tomet by volume.  Formaldehyde production in Russia totalled 642,800 tons in 2016 against 675,900 tons in 2016.  Russian production of acetic acid dropped in 2016 to 162,900 tons from 178,485 tons in 2015. 

Sibmetakhim opened its modernised units for formaldehyde and urea-formaldehyde concentrate (UFC-85) in December, a project which began in 2013.  The capacities of the plants comprise 15,000 tpa and 65,000 tpa respectively.  Sibmetakhim is now investing 1.2 billion roubles into methanol production with a view towards expanding daily capacity from 2,500 tons per day to 2,800 tons by 2018 and to 3,000 tons per day by 2019. 

Skovorodino methanol project

A feasibility study for construction of methanol plant at Skovorodino in the Amur region will be completed by the end of February, which will be followed by the active design stage.  The proposed capacity of the Skovorodino plant is 1.2 million tpa, at an estimated construction cost of 38 billion roubles.  The project, if approved, would become a resident in the Svobodny TOR in the Amur Oblast together with Gazprom and SIBUR.  Skovorodino is located on the Power of Siberia gas pipeline which is currently under construction.

The feasibility study is being conducted by a company called ESN, which will also be responsible for building the plant.  Investment in the project could create over permanent 230 new jobs.

The construction of a methanol and fertiliser chemical plant at Skovorodino was first considered by the National Chemical Group (NHG).  However, NHG is now proceeding with plans to build a complex at Nakhodka in the Primorsky Kray.  The advantage of Nakhodka is that it allows access to several markets including China, Japan, Korea, and South-East Asia whilst the Skovorodino plant will be forced to rely solely on the Chinese market.

Nakhodka fertiliser and methanol project

The Nakhodka fertiliser plant project (controlled by NHG) is expected to be included in the state programme for social and economic development of the Far East and the Baikal region.  The project has already passed the preliminary selection of the sub-commission for investment projects in the region.  Investments in the construction of complex of mineral fertilisers, according to Minvostokrazvitiya, amount to more than 400 billion roubles.

The plant’s capacities include 1.1 million tpa of ammonia, 2 million tpa of urea and 1 million tpa of methanol.  The products are intended mostly to be exported to Asia Pacific countries, and only small volumes are envisaged for the domestic market.  In December 2016, the Russian bank VEB and Japanese bank JBIC signed a memorandum of understanding to finance the construction of the fertiliser and methanol complex.  In September 2015 National Chemical Group, concluded the 20-year contract to supply 3.15 billion cubic metres of gas to Gazprom Mezhregiongaz. 

Akron 2016

Akron increased the production of mineral fertilisers by 19.8% in 2016.  Urea production increased by 32% and ammonium nitrate by 15.3%.  With the launch of a new ammonia unit at the industrial site Akron at Novgorod in 2016 production was 13.5% more than in 2015, while the production of fertilisers increased by 19.8% to 5.3 million tons. 

In 2016 a new unit Ammonia-4 produced 371,000 tons whilst urea production rose 23.3% to 823,000 tons.  Akron reduced methanol production by 11.4% in 2016 to 80,000 tons, whilst formaldehyde production fell 14.7% to 143,000 tons.

The EPC contract will enter into force after the organisation of project financing 28 February 2017.  In September 2016 a contract was signed with Hyundai Engineering, Hyundai Engineering & Construction and Toyo Engineering Construction, design and service Toyo Engineering Corp.  for the design, supply of equipment and construction of the complex. 

Akron 2016

Akron increased its net profit in 2016 by 53% over 2015, partly due to the sale of shares in Polish company Grupa Azoty.  Akron’s revenue decreased by 3% in 2016, whilst the EBITDA decreased by 27%.  Sales volumes grew by 13% to 6.35 million tons with an increase in output by 14% to 6.5 million tons. 

Cost of sales increased by 20% to 45.31 billion roubles.  In particular, for ammonia production growth at 29% gas costs increased by 28%.  In 2016 transportation costs increased by 15%, which was due to increased sales volumes and higher tariffs for railway transportation.  EBITDA of the company amounted to 29,86 billion roubles against 40.9 billion roubles a year earlier.  The level of profitability EBITDA amounted to 33% against 45% in 2015.  Net profit of the group increased from 16.7 billion roubles in 2015 to 25.52 billion roubles in 2016.  The net profit amounted to $381 million.

Skorovodino methanol project

Tehnolizing at Skovorodino plans to add MTBE production at its methanol project in the Amur Oblast, but needs to rely on Gazprom supplying butane from the Amur GPP which is under construction.  It does not make much commercial sense but Gazprom has been instructed by Putin to direct butane supplies from the Amur GPP to Skovorodino instead of exporting butanes.  The company has formulated an LPG export strategy from the Amur GPP to the Vanino port on the Pacific coast, which is being built.  Gazprom has now addressed to the Ministry of Energy of the Russian Federation with a request to reimburse part of the costs that the company may incur regarding the MTBE project at Skovorodino. 

The company Tehnolizing owns the oil terminal at Skovorodino, but due to falling oil transhipment volumes after the launch of the ESPO oil pipeline the group decided to restructure the business and to start producing methanol.  The facility also plans the production of MTBE.  The project capacity of the new methanol is expected to be around 1.2 million tpa

Berezkina has promised to organize the transportation of oil in the Amur refinery, which act against the construction of major oil companies and Transneft.  The planned capacity of the plant up to 6 million tons’ oil and condensate, which is funded by 90% Chinese investors might face the problem of supply of raw materials due to lack of capacity in pipelines Transneft. 

The production of fuel additives in the Amur region could be beneficial only if the low price of raw materials.  LPG can be bought elsewhere, but it will be expensive to drive across the country in the Amur Region. 

Methanol imports into Ukraine amounted to 2,200 tons in February, 13% more than in January.  Russian producers accounted for 2,100 tons in February, 36% up on January, whilst Belarussian producer Azot at Grodno supplied only 80 tons which was down by 80%.  The main buyers included gas-producing enterprises which accounted for 40% (or 903 tons).  The share of domestic trading companies in February was about 30% (673 tons), and producers of formaldehyde and its derivatives 28% (618 tons).  The average cost of methanol purchased by Ukrainian consumers abroad in February in dollar terms increased in January by almost 10%, to $300 per ton DAF Ukraine's border, against the recorded $275 per ton DAF border of Ukraine in January.

Metafrax Jan-Dec 2016

Metafrax achieved a record level of methanol production in 2016 of 1.058 million tons.  In the fourth quarter revenues for Metafrax amounted to 4.356 billion roubles and for the whole of 2016 17.14 billion roubles.  Sales in the fourth quarter rose by 7% due to increased volumes of methanol production, hexamine, urea-formaldehyde concentrate, pentaerythritol and concentrated formaldehyde. 

Metafrax tank wagons

Metafrax has purchased twenty tank wagons for the carriage of formaldehyde.  The cars have a load capacity of 76.5 tons, and the service life is estimated at 32 years.  In 2016 Metafrax bought 134 tank wagon for transportation of methanol.  The turnaround of new cars up to eight years, the volume of the boiler is 88 cubic metres and a load capacity of 73 tons.  In total, the rolling upgrade programme of Metafrax includes the replacement of 900 cars by 2019. 

The share of exports for Metafrax in total sales in 2016 comprised 35%.  The company stated that in 2016 there was a redistribution of supply of products, such as methanol, between the internal and external markets.  This was due to lower prices and complicated by the economic situation in Russia.  Key consumers in the domestic market remained Nizhnekamskneftekhim, which is expected in the coming years will increase the volume of purchases. 

Fosagro Production (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Ammonia

1,198.6

1,111.4

Urea

1,036.1

978.1

Phosphate fertilisers

5,929.9

5,353.1

Nitrogen fertilisers

1,495.0

1,433.4

Ammonium nitrate

458.9

455.3

Aluminium fluoride

46.0

36.1

Phosphoric acid

2,261.5

2,170.1

Sulphuric acid

4,296.1

4,711.2

Sodium Tripolyphospahe

92.9

123.5

Metafrax has forecast production of methanol in 2017 of 1.090 million tons.  Regarding projects, this year Metafrax intends to begin construction of the complex ammonia-urea-melamine, and run the installation of the partial oxidation of natural gas to ensure the production of 3,375 tons of methanol per day. 

Fosagro 2016

Fosagro increased production of fertilisers by 9.4% in 2016.  The production of phosphate fertilisers increased by 10.8%, and nitrogen by 4.3%.  For the twelve months it was produced 7.4 million tons of fertilisers, of which 5.9 million tons comprised phosphorus fertiliser. 

Fosagro increased sales increased by 8.8% over the year, reaching 7.2 million tons.  In the group of nitrogen phosphorus fertilisers has been achieved an increase of 10.6% to 5.8 million tons of nitrogen fertilisers by 2.1% to 1.39 million tons.  In the fourth quarter sales of nitrogen fertilisers dropped by 7.1% to 327,300 tons. 

Sales volumes in the Russian market increased by 30% to 2.1 million tons.  In 2016, the Russian market was one of the fastest growing in the world due to the rapid development of the agricultural sector which has been facilitated in the past couple of years since the establishment of counter-sanctions on food products.

Togliattiazot 2016

Togliattiazot produced 2.856 million tons of ammonia in 2016 versus 2,845 million tons in 2015.  Despite the slight increase in production volumes, due to technical improvements the company reduced consumption of natural gas by 5% in the production of ammonia (from 1.28 to 1.22).  Urea production fell to 552,200 tons.  The investment programme of the company, calculated to 2021, involves an investment in new projects worth 80 billion roubles.  This includes the construction of the new transhipment complex at Taman with a capacity of 5 million tpa.  Throughput of urea will be 2 million tpa and ammonia 3 million tpa.  The capacities for Togliattiazot include 3 million tpa of ammonia and 960,000 tpa of urea.

Key export markets for Fosagro focus on Europe, Latin America and Asia.  In Europe, sales rose by more than 20% and exceeded 1.5 million tons.  In Latin America, sales fell by 10% to 1.3 million tons whilst shipments to Asia increased by 20% to 1.1 million tons. 

Fosagro could launch a new production unit for ammonia at the Cherepovets site in July 2017, followed by the urea plant in September.  The new ammonia unit (capacity 760,000 tpa) undertook tests in late 2016 before commissioning, whilst the last delivery of components and equipment for the urea were supplied before the end of the year.  Capacity of the new unit for production of urea, which will be the third for the Cherepovets site, amount to 500,000 tpa.  Construction work on the urea unit began in 2015.  The net profit of Togliattiazot under RAS in 2016 fell by almost 17 times compared to 2015 and amounted to 1.283 billion roubles, the largest Russian ammonia producer reports.

Togliattiazot 2016

Revenues for Togliattiazot fell by 30% in 2016 and amounted to 44.35 billion roubles.  Profit from sales fell 3.7 times and amounted to 7.34 billion roubles, whilst profit before tax fell almost 12 times to 2.39 billion roubles.  The decrease in Togliattiazot's revenue is due to the drop in prices on the world market for ammonia and urea.  The revenue for the reporting period decreased against the backdrop of maintaining the total sales volume in 2016, 2 million tons.

The cost of sales of the company decreased by 4% and amounted to 22.74 billion roubles.  Commercial expenses increased by 20%, to 11.28 billion roubles.  Administrative expenses decreased by 1% and amounted to 2.99 billion roubles.  Other expenses in 2016 amounted to 4.96 billion roubles against revenues a year earlier.

Togliattiazot continued the strategic investment programme aimed at modernising and increasing the efficiency of production facilities.  The volume of investments in the reporting period amounted to 6.2 billion roubles.  By 2019 Togliattiazot aims to complete construction of its eighth ammonia unit with a capacity of 1.86 tons per day, 680,000 tpa, increasing capacity by 22.7% from the current 3 million tpa. 

Russia currently operates 28 ammonia plants, which produce more than 13 million tpa.  All of the main players intend to increase output, and an additional 3 million tpa of capacity is expected to arrive by 2020.  The devaluation of the rouble has made Russian ammonia capacity growth projects attractive in comparison with competitors.  even with the over-production and low dollar price of products.

Fosagro 2016

Fosagro increased its net profit by 64% at the end of 2016 whilst revenue decreased by 1% to 187.7 billion roubles.  In dollar terms, Fosagro achieved revenues of $2.8 billion compared with $3.11 billion in 2015.  The EBITDA decreased by 12% over the previous year and amounted to 72.4 billion roubles.  The EBITDA margin decreased by 4% to 39%, whilst the operating profit decreased by 16% to 61.6 billion roubles for the period ($919 million).  At the same time, net profit rose to 59.9 billion roubles, or $893 million. 

The company notes that the devaluation of the rouble in the last year has supported financial indicators due to the fact that the prices of the basic products in overseas markets are denominated in dollars, while costs are mainly in roubles.  At the same time the strengthening of the rouble led to profit from exchange rate differences in the amount of 16.96 billion roubles.  Also on the index was influenced by the revaluation of debt denominated in US dollars.  In 2015, Fosagro showed foreign exchange loss to 22.18 billion roubles.

Bashkir Soda 2016

Bashkir Soda Company increased its net profit in 2016 by 48.3% whilst revenue rose 17%.  The company received proceeds in the amount of 39.1 billion roubles.  Cost of sales increased by 11.5% to 22.9 billion roubles, there was rise in raw materials by 15.2% to 10.54 billion roubles.

The company's gross profit rose 25.6% to 16.26 billion roubles.  Profit from sales amounted to 14.34 billion roubles, and net profit 10.9 billion roubles.

The main shareholders of Bashkir Soda Company are Bashkiria (in aggregate 38.28% of the shares, including 19.14% directly owned and 19.14% through a 100% daughter of Regional Fund), Bashkhim (57.18%).

Organic chemicals

Russian butanol production Jan-Dec 2016

Russian production of butanols totalled 225,300 tons in 2016, 5% down on 2015.  N-butanol production totalled 138,900 tons and isobutanol totalled 85,700 tons.  Russian butanol production amounted to 19,740 tons in December, 18% more than in November.  Gazprom neftekhim Salavat produced 9,480 tons, SIBUR-Khimprom 7,910 tons, Azot Nevinnomyssk 2,000 tons and the Angarsk Petrochemical 360 tons. 

Russian butanol sales, Jan-Dec 2016

Russian Butanol Consumption (unit-kilo tons)

Consumer

Jan-Dec 16

Jan-Dec 15

Akrilat

25.3

24.6

Dmitrievsky Chemical

22.4

23.8

Plant of Synthetic Alcohol

1.2

1.9

Volzhskiy Orgsintez

6.3

5.9

Roshalsky Plant of Plasticizers

1.5

0.0

Others

15.2

15.7

Total

71.9

71.8

Russian Organic Chemical Production

(unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Jan-Dec 14

Isopropanol

33.4

33.4

29.4

N-Butanol

139.0

147.9

145.4

Isobutanol

86.3

90.1

91.7

Propylene glycol

0.9

1.1

0.4

Phenol

221.9

225.4

240.8

Acetic acid

189.7

178.7

171.9

Butyl acetate

48.6

38.3

42.1

Butanol sales on the domestic merchant market totalled 71,900 tons in 2016 against 71,800 tons in 2015.  The two largest buyers remained Akrilat (SIBUR) at Dzerzhinsk and the Dmitrievsky Chemical Plant, which is located in the Ivanovo region. 

Until now the butanol producers either sold product on the domestic market or exports, but internal processing was relatively small.  That position changed at the end of 2016 following the start-up of the new acrylate complex.  In view of the declining export opportunities in the Chinese market, the start-up of the Salavat project and subsequent switch to internal processing represents a major change for the butanols market. 

Russian butanol exports, Jan 2017

Butanol exports dropped in January 2.1 times against December to 1,450 tons, and were 46% lower than in January 2016.  SIBUR-Khimprom shipped 980 tons to foreign markets in January and Azot Nevinnomyssk 450 tons.  Another 200 tons was supplied from the Dmitrievsky chemical plant.  Gazprom neftekhim Salavat did not export products in January due mainly to the start of operations at Acrylic Salavat in which n-butanol is used in the production of butyl acrylate.  Ukraine was the largest destination for Russian exports in January, accounting for 48% of deliveries, followed by Turkey (31%) and the Netherlands (19%). 

Butanol sales on the domestic market amounted to 4,640 tons in January, of which SIBUR-Khimprom supplied 4,180 tons, Azot Nevinnomyssk 270 tons and Gazprom neftekhim Salavat 190 tons.  The introduction of the Acrylic Salavat complex has significantly affected merchant availability from Gazprom neftekhim Salavat where n-butanol is being directed to the production of butyl acrylate.  It is expected that the supply of butanols from Salavat to outside customers will now be minimal. 

Regarding recent consumption trends, Akrilat purchased only 1,200 tons of butanols in January, whilst Dmitrievsky Chemical Plant purchased 240 tons.  Other buyers included Volzhskiy Orgsintez with 580 tons and Ural Plant of Plasticizers 180 tons.  Moscow based Nefttorgservis purchased 1,980 tons of isobutanol in January. 

Russian phthalic anhydride market

The main application area for phthalic anhydride in Russia is the production of phthalate plasticizers followed by the production of alkyd paint and varnish materials.  Both of these sectors have been fairly stagnant in recent years and overall consumption volumes have not seen much change.  Production amounted to 84,300 tons in 2016 which was 10% down on 2015.  Kamteks-Khimprom reduced production by 13% to 75,320 tons (89% of production in Russia).  In addition, the company increased the production of dioctyl phthalate at its own capacities by 32%.

Russian Phthalic Anhydride Market (unit-kilo tons)

 

2016

2015

Production

84.3

93.8

Export

38.9

48.6

Import

8.2

6.0

Market Balance

53.6

51.2

 

Other Russian solvents, Jan-Dec 2016

Russian Phthalic Anhydride Production

(unit-kilo tons)

Producer

Jan-Dec 16

Jan-Dec 15

Gazprom neftekhim Salavat

9.0

6.9

Kamteks-Khimprom,

75.3

86.9

Total

84.3

93.8

Acrylic acid production at Dzerzhinsk rose 8.4% to 32,240 tons in 2016 whilst butyl acrylate production rose 6.1% to 40,940 tons.  Isopropanol production, carried out Orsk, was unchanged in 2016 at 33,400 tons whilst butyl acetate production rose from 38,300 tons in 2015 to 48,600 tons in 2016. 

DOP imports into Russia amounted to 223 tons in December against 69 tons in November.  All of the product in December was supplied by the Polish company Boryszew.  Total DOP imports in 2016 into Russia amounted to 2,640 tons, which is 34% less than in 2015.  The share of Boryszew in imports amounted to 89%.

In February 2017, imports of dioctyl phthalate to Russia amounted to about 86 tons.  For comparison: in January this year 134 tons of products from abroad were delivered to the country, and in February 2016 - 164 tons.  In February 2017, the DOP was supplied to Russia by the Korean Aekyung Petrochemical (49% of the total import volume), the Polish Boryszew (26%) and the Czech DEZA (25%).  In just two months of 2017, imports of imported dioctyl phthalate amounted to 220 tons.  This is 7% more than in the same period in 2016.

Other Russian solvents, Jan-2017

Metafrax produced 2,050 tons of pentaerythritol in January against 2,100 tons in December.  Phthalic anhydride exports from Russia amounted to 4,070 tons in January, 32% less than in December last year and 24% lower than in January 2016.  The largest destination included Egypt (15% of total supplies), Poland (14%), China (13%), Pakistan (13%), Tunisia (10%), Finland (10%), United Arab Emirates (8%) and the United States (7%).  Phthalic anhydride production totalled 84,340 tons in 2016, 10% less than in 2015.

Other products

Bashkir Soda 2016

Bashkir Soda produced 1.6 million tons of soda ash in 2016 at its two plants Sterlitamak and Berezniki, 6.3% higher than in 2015.  Liquid caustic soda production, undertaken at Sterlitamak, rose 8.5% to 204,000 tons whilst PVC also Sterlitamak rose 2.7% to 249,000 tons.  Sodium bicarbonate production rose 5% to 137,000 tons. 

Nefis Cosmetics 2016

Nefis Cosmetics increased revenue by 40% in 2016 to 18 billion roubles.  The net profit increased more than 5 times and amounted to 778 million roubles.  A significant rise in sales was achieved in liquid detergents and toilet soap by 22% for each product group in physical terms.  The production capacity of liquid detergents increased to 12,000 tons per month last year, whilst the production capacity of toilet soap rose to 2,000 tons per month.  After the major global brands, Nefis Cosmetics has retained third place in the Russian market of washing powders and the second place in the market of washing-up liquids.  

Polyplastik 2016

Polyplastik increased sales by 2.3% in 2016 although the domestic market dropped by around 3% in consumption.  Sales were up in 2016 largely due to major orders from SIBUR, including a tender for 15,000 tons of pipes for water supply for ZapSibNeftekhim.  The Far East is becoming more important for Polyplastik following the launch of a new plant at Khabarovsk in 2016.

Polyplastik plans to increase its gradually share of exports in total sales to around 30% by 2019.  This year is expected to be difficult for manufacturers of plastic pipes rather difficult, as no new major projects are expected to be introduced.  The major fall in pipe consumption took place in 2015 when sales from Polyplastik dropped by around 15%. 

Polyplastik and BASF signed an agreement on cooperation in the framework of the implementation of joint projects for the automotive industry.  Polyplastik and OOO PSMA Rus signed a new agreement for the supply of polymer composite materials to be used in the manufacture of parts for Peugeot and Citroen cars.  The agreement was signed on 31 January at Kaluga. 

Kaustik Volgograd 2016

Kaustik (Volgograd, part of NIKOCHEM group) increased its net profit by 41% in 2016 whilst revenues rose by 2.3% to 16.6 billion roubles.  The company experienced a rise in production costs 14% in 2016.  PVC accounts for 31.4% of the company’s product sales, caustic soda 35%, including soda liquid 13%, and soda granulated 22%.  The gross profit of Kaustik amounted to 6.73 billion roubles against 5.12 billion roubles in 2015.  Profit from sales increased by 42% to 4.17 billion roubles.  Profit before tax amounted to 2.78 billion roubles, and net profit 2.299 billion roubles. 

Khimprom Novocheboksarsk

Khimprom at Novocheboksarsk increased its net profit 2.7 times in 2016 whilst revenues grew by 19.5% to 8.45 billion roubles.  The cost of production increased from 4.6 billion roubles to 5.5 billion roubles, whilst the gross profit rose 17.9% to 2.9 billion roubles.  The profit from sales amounted to 1.26 billion roubles.

The main increase in production and sales came in hydrogen peroxide and rubber chemicals used in the production of automobile tyres as well as caustic.  The production of hydrogen peroxide was increased by 40% to 95,000 tpa in terms of 30% concentration.  Profit before tax increased by 2.6 times to 850.9 million roubles and the net profit amounted to 668.72 million roubles against 241.05 million roubles in 2015.

Belarus

Belarussian polymer trade, Jan-Dec 2016

Belarussian PET Raw Material Imports

(unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Paraxylene

23.9

12.4

PTA

55.7

49.5

MEG

67.3

64.6

Belarussian PVC imports dropped in 2016 to 24,800 tons.  The main reason for the decline is a fall in export sales of finished products.  Polypropylene imports into Belarus rose by 14.3% in 2016 to 98,600 tons.  The largest increase occurred in the external supply injection moulding propylene copolymers, whilst overall the largest type of polypropylene imported was homopolymer which rose to 64,357 tons compared to 61,316 tons in 2015.  In 2016, the import volume of propylene copolymers totalled 31,531 tons against 21,843 tons in 2015. 

Mogilevkhimvolokno PTA Imports (unit-kilo tons)

Country

Jan-Dec 16

Jan-Dec 15

Poland

23.8

31.1

Russia

4.8

3.2

South Korea

25.1

9.0

Portugal

1.0

0.0

Thailand

1.1

3.2

Total

55.7

46.5

Polyethylene imports into Belarus increased by 26.3% in 2016 to 136,999 tons against 105,109 tons in 2015.  LDPE imports totalled 69,178 tons against 45,850 tons in January to December 2015, whilst HDPE imports rose 12.3% to 37,395 tons.  Exports of polyethylene from Belarus totalled 111,147 tons in 2016 against 122,124 tons in 2015, of which around three quarters were shipped to Russia.  Regarding synthetic rubber imports, shipments totalled 42,084 tons in 2016 against 44,100 tons in 2015.  Most of the synthetic rubber exports were sourced from Russia. 

PET exports from Belarus increased to 62,845 tons in 2016 against 47,084 tons in 2016.  Exports to Russia rose to 45,661 tons in 2016 against 27,736 tons in 2015.  The next largest market was Uzbekistan where Belarus sent 5,374 tons in 2016.  The average price for PET exports in 2016 amounted to $903 per ton versus $927 per ton in the previous year. 

Belarussian Polymer Imports (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

PVC

24.8

25.7

Polypropylene

98.6

85.0

LDPE

85.0

54.4

HDPE

44.9

43.0

Polystyrene

67.6

64.1

PTA imports into Belarus totalled 45,400 tons in 2016, against 44,500 tons in 2015.  In 2016 imports from South Korea rose to 25,055 tons against 11,048 tons in 2015, whilst imports from Poland dropped from 32,033 tons to 23,796 tons.  The average price per ton for Belarussian PTA imports dropped from $765 in January to December 2015 to $690 in 2016. 

Belarussian Acrylonitrile Exports (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Kazakhstan

0.0

0.5

Russia

2.9

2.4

Hungary

4.0

12.6

Iran

3.4

0.0

Netherlands

4.0

9.0

Romania

0.3

0.0

Turkey

22.6

14.1

Total

37.3

38.6

Paraxylene imports into Belarus totalled 23,937 tons in January to December 2016, against 12,444 tons in 2015.  All of the paraxylene was sourced from Russia.  MEG imports into Belarus totalled 67,438 tons in January to December 2016 versus 60,495 tons in 2015.  Russian producers supplied almost all of the market requirements, whilst Saudi Arabia supplied smaller volumes. 

Belarussian chemical trade, Jan-Dec 2016

In the first three months of 2017 Polymir produced 15,800 tons of LDPE which was 53% less than in 2016 when volumes totalled 33,700 tons.  Production this year has been affected by the fire last June which continues to affect production.  The fire damaged technological equipment, stopped production of PE of the second stage (capacity of 65,000 tpa).  The exact timing of line under repair is not known but the launch will occur no earlier than next year.

In the chemical division, acrylonitrile exports dropped slightly in 2016 to 37,329 tons against 38,613 tons in 2015.  Turkey was the main destination for Belarussian exports in 2016, rising to 22,600 tons against 14,100 tons in 2015, whilst exports to Hungary dropped from 12,600 tons in 2015 to 4,000 tons.  The average price for Belarussian acrylonitrile exports amounted to $875 per ton in 2016 against $1,078 per ton in 2015. 

Belarussian Organic Chemical Exports

(unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Acrylonitrile

37.3

38.6

Caprolactam

6.5

32.9

Phthalic anhydride

21.5

24.1

Methanol

31.8

71.2

Phthalic anhydride exports totalled 21,549 tons in 2016 against 24,061 tons in 2015.  The main destinations for Belarussian phthalic anhydride exports included Russia, Ukraine and Poland. 

Caprolactam exports stopped earlier in the year so as to concentrate on more internal processing, whilst lower methanol production at Grodno reduced exports from 71,211 tons in January to December 2015 to 31,751 tons in 2016.  The major destinations for Belarussian methanol exports currently consist of Ukraine and Poland. 

Ukraine

Ukrainian Polymer Imports (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

PVC

100.5

85.8

LDPE

68.6

52.4

LLDPE

58.8

45.0

HDPE

125.9

93.4

Ethylene Vinyl Acetate

13.6

9.9

PP

119.6

96.2

Ukrainian polyethylene imports

In the first two months of 2017 Ukrainian imports of polyethylene increased by 2% to 39,700 tons, including 21,500 tons in February against 18,200 tons in January.  HDPE imports declined to 15,000 tons from 18,700 tons in the first two months in 2016 whilst LDPE imports rose 11% to 11,800 tons.  LLDPE imports saw the largest rise to 10,600 tons against 7,900 tons whilst other types of polyethylene rose to 2,200 tons versus 1,200 tons in 2016.

Ukrainian PVC imports

Ukrainian imports of PVC amounted to 14,100 tons in the first two months in 2017, 24% below the same level in 2016.  Russian PVC exports amounted to 2,800 tons in the first two months in 2017, 87% up on the same period in 2016.  Further prospects of the Ukrainian market of PVC are associated with the launch of Karpatneftekhim which could take place in May 2017. 

Ukrainian Polypropylene Imports (unit-kilo tons)

Category

Jan-Feb 17

Jan-Feb 16

Homo

14.4

13.6

Block

1.6

1.6

Random

1.6

2.1

Propylene copolymers

0.0

0.0

Other

0.5

0.4

Total

18.1

17.6

Ukrainian polypropylene imports totalled 18,100 tons in the first two months in 2017, 3% up on the same period in 2016.  Homopolymer imports rose from 13,600 tons to 14,300 tons whilst block copolymer imports rose from 1,600 tons to 1,900 tons.  Imports of stat copolymers fell from 2,000 tons to 1,600 tons.

Ukrainian polypropylene market expanding

 

Ukrainian Polypropylene Market (unit-kilo tons)

 

2016

2015

Jan-Feb 17

Jan-Feb 16

Production

0.0

0.0

0.0

0.0

Import

111.3

89.2

18.1

17.6

Export

0.0

0.0

0.0

0.0

Market Balance

111.3

89.2

18.1

17.6

Last year the Ukrainian polypropylene market recorded a significant increase over 2015.  Large quantities of the product were imported from Saudi Arabia, Russia, Slovakia, and Hungary.  Turkmenistan also increased exports into Ukraine in 2016, totalling 5,400 tons against 540 tons in 2015, whilst Uzbekistan through of UzKorGasChemical supplied 3,000 tons.  The leader in supply in 2016 was SABIC.  This year, the capacity of the Ukrainian market may increase by another 10-12%. 

Lukoil sells Karpattneftekhim

Lukoil has completed the sale of Karpatneftekhim in the Ivano-Frankivsk region of western Ukraine.  This company was the last asset in Ukraine belonging to Lukoil.  Karpatneftekhim’s new controlling shareholder is expected to be the Ukrainian citizen Ilham Mammadov, former head of foreign investments for Lukoil, through Xedrian Holding.  More than 25% in Karpatneftekhim is to be bought by Techinservice Limited (UK).  Accordingly, the deal was worth around $25 million which is way down on the estimate of last year of at least $100 million. 

Up to 2015, Lukoil had invested $543.4 million in the reconstruction of Karpatneftekhim.  The design capacity for PVC for the Kalush plant comprises 300,000 tpa, caustic soda 200,000 tpa and polyethylene 100,000 tpa.  The plant was shut down in September 2012 due to the unfavourable situation on the petrochemicals market, and still not running (except for a brief resumption in 2013).  There are now prospects of a restart in the next few months.  In August 2014 Lukoil sold its 240 gas stations and six tank farms to the Austrian investment company AMIC, and Karpatneftekhim remained its only asset in Ukraine. 

Ukrainian chemical news

The export of Ukrainian benzene for synthesis increased 33.6 times to 6,000 tons in February.  The significant increase is primarily due to the resumption, for the first time since August 2016, of the sale abroad of the products of Ukrtatnafta.  Last month, deliveries of aromatic raw materials produced by the Kremenchug refinery to the world market amounted to 5,300 tons.  In addition, Zaporozhkoks increased shipments of the product to foreign markets by 3.9 times to 698 tons.  For the first two months of 2017, Ukrainian companies exported 6,200 tons of benzene which is 6% more than for the comparable period of 2016.

Ukrainian chemical imports, Jan-Feb 2017

Imports of phthalic anhydride into Ukraine amounted to 210 tons in February against 142 tons in January and 141 tons in February 2016.  The sole supplier in February was the Belarusian company Lakokraska at Lida.  Polikem was the main buyer taking 189 tons.  In the first two months in 2017 imports of phthalic anhydride amounted to 352 tons which is 29% less than for the same period in 2016.

DOP imports into Ukraine amounted to 229 tons in February against 283 tons in January.  Czech producer Deza accounted for 185 tons in February and the other 44 tons from the Polish producer Boryszew.  In the first two months in 2017, DOP imports to Ukraine totalled 512 tons which is 83% more than the same period in 2016.

Central Asia/Caucasus

Kazakh Polymer Imports (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

HDPE

73.3

67.2

LDPE

17.1

16.3

LLDPE

5.5

5.3

PVC

51.0

49.0

Polypropylene

24.5

22.5

Kazakh polymer imports, Jan-Feb 2017

In the first two months of this year, imports of polypropylene rose in Kazakhstan by 49% to 5,100 tons from 3,400 tons.  Imports amounted to 3,100 tons in February against 2,000 tons in January.

Atyrau gas & chemical complex

Kazakhstan at the expense of the state budget has completed the construction of infrastructure for gas and chemical complex in Atyrau region.  The project for the construction of an integrated petrochemical complex involves the implementation in two phases. The first is started polypropylene production capacity of 500,000 tpa and the second polyethylene capacity of 800,000 tpa and butadiene.

The state will take control of building the infrastructure for the first and second phases.  The construction of a polypropylene production can begin in the summer of 2017.  Earlier it was scheduled for launch in 2019, the production of polyethylene 2020.

the first phase of the project is operated Kazakhstan Petrochemical Industries Inc. (KPI Inc.), controlled by United Chemical Company (51%) and Company Almex Plus (49%).

Investments, according to the Ministry of Energy, will be about $2.5 billion. At the beginning of 2016 China Development Bank (CDB) has approved a loan for the construction of the production of polypropylene in the amount of $2 billion.  At the expense of the loan will be 100% funded by the EPC-contract signed December 2015 with the Chinese CNCEC in the amount of $1.795 billion.  The rest of the financing will be provided at the expense of the organisers of the project.

In the second step of creating chemical complex will be introduced into the polyethylene production operation and butadiene. Investments are estimated at $4.15 billion.  The operator of the second phase of construction of the complex is a joint venture KLPE, which is on an equal footing monitored LG Chem and Kazakhstan.  In early 2015 LG Chem decided to withdraw from the company's share capital. United Chemical Company continues to search for a strategic partner.

Shurtan Gas Chemical Complex expansion

Uzbekneftegaz has increased its plans for expanding capacity of the Shurtan Gas Chemical Complex.  Instead of increasing capacity from 125,000 tpa to 200,000 tpa the Uzbek gas company now aims to raise capacity to 500,000 tpa. 

In accordance with a new concept, Uzbekneftegaz wants to use naphtha produced from the synthetic GTL unit at Shurtan for the production of olefins and the production of new grades of polymers.  Project costs were originally estimated at over $400 million.  Of this amount, about $100 million will be allocated from the Fund for Reconstruction and Development of Uzbekistan, another $250 million from a foreign partner, and the rest of the equity Uzbekneftegaz.  All work is scheduled for completion by the end of 2019. 

It already clear though that after changing the concept of the project and its cost will increase, and the timing of operation.  The Uzbek side previously signed a memorandum of understanding with GS E & C from South Korea in relation to a joint study of the project to modernize the capacity of the Shurtan complex. 

Azerbaijan Chemical Production (unit-kilo tons)

Product

Jan-Dec 16

Jan-Dec 15

Ethylene

103.9

107.1

Polyethylene

98.3

103.3

Propylene

52.0

56.2

Isopropanol

9.0

11.4

Barium Sulphate

59.8

61.6

C4s

19.5

24.7

Methanol

117.9

95.8

Azerbaijan chemical industry

Azerkhimya produced 5,200 tons of propylene in March, 26% more than in February.  From the production 960 tons was processed into isopropanol.  In the first quarter Azerkhimya produced 14,400 tons of propylene, 4% up on the same period in 2016.   C4 sales amounted to 8,700 tons in the first quarter against zero in the first three months last year. 

 
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