SIBUR-associated & natural gas prices - Issue 316 || PKN Orlen energy - Issue 323 || PDH Polska-polyppropylene project - Issue 323 || Unipetrol’s investment into polyethylene - Issue 323 || Ciech-polyolefin trade based on Iranian supply - Issue 323 || Grupa Azoty-new polyamide plant start-up - Issue 323 || BorsodChem-new chlorine plant - Issue 323 || Russian chemical production, Jan-Aug 2017 - Issue 323 || Russian chemical trade balance - Issue 323 || Delivery of equipment to ZabSibNeftekhim-August 2017 - Issue 323 || SIBUR-ethane for Amur Gas-Chemical Complex - Issue 323 || VNHK-Saipem - Issue 323 || Rosneft, three cluster approach for petrochemical investments - Issue 323 || Tatarstan-ethane expansion for Kazanorgsintez - Issue 323 || Russian ethylene production Jan-Aug 2017 - Issue 323 || Russian propylene exports, Jan-Aug 2017 - Issue 323 || Russian propylene sales Jan-Aug 2017 - Issue 323 || Russian styrene sales Jan-Aug 2017 - Issue 323 || Russian HDPE production, Jan-Aug 2017 - Issue 323 || Russian polypropylene, Jan-Aug 2017 - Issue 323 || Russian PVC, Jan-Aug 2017 - Issue 323 || Russian polycarbonate, Jan-Aug 2017 - Issue 323 || Russian paraxylene, Jan-Aug 2017 - Issue 323 || PTA imports, Jan-Jul 2017 - Issue 323 || Russian MEG, Jan-Aug 2017 - Issue 323 || Russian benzene production, Jan-Aug 2017 - Issue 323 || Russian benzene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene exports, Jan-Aug 2017 - Issue 323 || Russian phenol production, Jan-Aug 2017 - Issue 323 || Russian C4s, Jan-Aug 2017 - Issue 323 || Kazan Plant of Synthetic Rubber-silicon project - Issue 323 || Russian synthetic rubber producer news - Issue 323 || Russian methanol exports, Jan-Aug 2017 - Issue 323 || Russian methanol domestic sales, Jan-Aug 2017 - Issue 323 || Metafrax-Casale, 2 October 2017 contract - Issue 323 || Gazprom-gas supply agreements for methanol and fertiliser projects - Issue 323 || Yatek methanol project-Japanese involvement - Issue 323 || Russian butanol production, Jan-Aug 2017 - Issue 323 || Saratovorgsintez-acrylamide project - Issue 323 || Calcium hydroxide Novocheboksarsk - Issue 323 || Ukrainian polymer imports, Jan-Aug 2017 - Issue 323 || Karpatneftekhim restarting export activity - Issue 323 || SOCAR completes overhaul of cracker and polyethylene plant - Issue 323 || SOCAR-chemical exports, Jan-Sep 2017 - Issue 323 ||
 


Chemical news Central Europe & Russia

MOL 2017

MOL increased its EBITDA by 14% in 2017, comfortably outperforming its 2017 target on the back of a strong financial and operational delivery of all business divisions.  MOL’s downstream segment again posted strong results and remained the main earnings contributor, increasing its contribution by 2% due to internal efficiency programmes and the still supportive external environment.

Ethylene production for the MOL Group from its plants in Hungary and Slovakia rose from 687,000 tons in 2016 to 767,000 tons in 2017.  Propylene production rose from 353,000 tons to 393,000 tons.  Butadiene and raffinate production at MOL’s Tiszaujvaros complex rose respectively to 83,000 tons and 125,000 tons against 53,000 tons and 79,000 tons in 2016. 

Olefin merchant sales from MOL’s plants in Hungary and Slovakia totalled 210,000 tons in 2017 from 190,000 tons in 2016.  BorsodChem is one the main end-users of merchant ethylene from MOL’s Tiszaujvaros plant.  Internal olefin sales in the MOL Group totalled 574,000 tons in 2017 against 570,000 tons.  Large rises by MOL were recorded for polyolefin sales in 2017.

MOL-butadiene maintenance

Butadiene sales by MOL increased in 2017 to 81,000 tons from 54,000 tons in 2016. On 26 February MOL closed the production of butadiene at Tiszaújváros for unplanned repairs. The enterprise will resume the capacity of 70,000 tpa in mid-March.  In 2018 the company entered into contracts with producers of styrene butadiene rubber from East Europe and North-West Europe.

MOL-JSR S-SBR rubber plant completed in Hungary

The MOL Group and JSR Corporation have opened the new synthetic rubber plant at Tiszaujvaros in Hungary with a production capacity of 60,000 tpa.  The new plant located will produce styrene-butadiene rubber (S-SBR), using butadiene from the neighbouring MOL plant.  The construction of the new plant began in 2015 on the basis of a joint venture established between MOL and JSR Corporation two years earlier, which covered 49% and 51% respectively.

PKN Orlen-Lotos and Unipetrol

Poland's government has outlined plans to merge PKN Orlen and Grupa Lotos in a bid to create a larger player capable of competing on international markets.   PKN Orlen, with market capitalisation of around zl 40 billion, has signed a letter of intent to buy from the state at least 53% of shares in Lotos, with a total market value of zl 10 billion. 

Regarding other acquisitions, Orlen’s tender offer for Unipetrol’s minority shares was accepted recently.  Strengthening the position of PKN Orlen in the shareholding structure of the largest refinery and petrochemical group in the Czech Republic is in line with the group's strategy, including integration of refining assets, extension of the petrochemical value chain and development of the retail network.  It will enable more efficient use of synergies within the Orlen Group and strengthen its competitive position.  As a result, PKN Orlen could increase its shareholding in Unipetrol to 94.03% which may allow it to take full control.  The key for the transaction was the consent of Paulinino Limited, holder of over 20% in Unipetrol shares.

Impact of potential merger Orlen-Lotos

The planned takeover of Lotos by Orlen act a primary facilitator in the transformation of the fuel and chemical sector in Poland.  The shares of Grupa Lotos (53.2%), owned by the State Treasury will require PKN Orlen to pay up to zl 6 billion.

Orlen may need to sell some assets to part finance the transaction, such as Anwil.  This, in turn, could open the way for further consolidation in Polish chemistry.    The merger of the largest Polish fertiliser companies has been discussed for years, and thus could involve Azoty and Anwil being merged which could bring about numerous synergies. The greater potential of the new company could also translate into a more effective fight against the growing threat from Russian fertiliser producers to the Polish market.

Czech polyethylene trade 2017

Czech exports of polyethylene rose from 188,800 tons in 2016 to 327,300 tons in 2017, following the revival of ethylene production at Litvinov.  HDPE exports from the Czech Republic rose from 100,500 tons to 233,800 tons in 2017, whilst at the same time imports dropped from 135,100 tons to 112,200 tons.  Overall imports of polyethylene dropped in 2017 to 320,900 tons from 335,900 tons in 2016. 

Czech chemical trade 2017

Czech exports of dinonyl or didecyl orthophthalates rose in 2017 to 35,300 tons against 30,800 tons in 2016.  Deza is the sole producer of plasticizers in the Czech Republic and also produces phthalic anhydride where export shipments rose to 15,800 tons in 2017 against 14,500 tons.

Methanol imports into the Czech Republic totalled 96,800 tons in 2017 against 88,000 tons in 2016.  Germany supplied 36,931 tons in 2017 followed by Russia with 35,575 tons, Norway with 12,305 tons and Serbia with 10,212 tons.  Bisphenol imports into the Czech Republic totalled 28,200 tons in 2017 against 27,500 tons in 2016, the main suppliers included South Korea and the Netherlands.

Polish chemical trade 2017

PTA exports from Poland dropped in 2017 to 329,000 tons against 402,900 tons in 2016.  Germany remained the main destination, accounting for 290,500 tons in 2017 against 314,900 tons.  PTA is produced by PKN Orlen at Wloclawek. 

Propylene imports into Poland totalled 180,300 tons in 2017 against 164,300 tons in 2016.  In the past two years Russia has been the main source of Polish imports, followed by Germany.  In the second half of 2017 Karpatneftekhim at Kalush in western Ukraine started supplying propylene to Poland.

Polish methanol imports totalled 486,200 tons in 2017, rising from 461,200 tons in 2016.  Imports from Russia dropped from 309,880 tons in 2016 to 283,647 tons in 2017.  Germany increased shipments from 66,683 tons to 98,672 tons in 2017 whilst Norway increased shipments from 42,129 tons to 89,573 tons.

MSK Kikinda

Serbia's government is analysing the option for the restructuring of MSK Kikinda after its attempt to sell the company failed.  The government will see how to restructure the company, in order to prepare it for partial privatisation.  A single company, Cyprus-based Kronospan Chemical Holdings, bought tender documents but did not place a bid.    In 2017 MSK increased methanol exports from 118,400 tons in 2016 to 129,800 tons whilst acetic acid exports rose from 64,300 tons to 90,900 tons.

Grupa Azoty is to cease production of DOP

Grupa Azoty ZAK is cease the production of ortho-phthalate plasticizers at Kedzierzyn, including DOP.  The company’s future long-term strategy is intended to be based on non-orthophthalate DEHT/DOTP (Oxoviflex®) and specialty plasticizers.   

Grupa Azoty ZAK intends to increase its Oxoviflex® capacity with an additional 15,000 tpa up to 65,000 tpa, and plans to launch a new plant in 2017.  The new policy includes the withdrawal of DEHP/DOP (standard and medical grade), as well as DPHP.  These products will be available until the end of inventory.  Grupa Azoty ZAK started DEHP/DOP production in 1963, and at peak production capacity stood at 70,000 tpa.

Currently Grupa Azoty ZAK is the largest European producer of DEHT/DOTP.  Increasing capacity of Oxoviflex® (DEHT/DOTP) is a result of the new product policy directed at market and customer requirements.  Grupa Azoty has recently started a pilot plant which is dedicated to producing test batches of new specialty plasticizers which could be introduced to the oxo segment product portfolio.  

Grupa Azoty-coal supplies

The chemical companies belonging to Grupa Azoty concluded agreements for the purchase of coal from Polska Grupa Górnicza worth over zl 212.5 million net. The agreements were concluded for an indefinite period with effect from 1 January 2018, divided into annual delivery periods. Deliveries for individual companies (Kedzierzyn, Police, Pulawy and Tarnow) will be specified in individual contracts.  However, the commercial terms were negotiated on behalf of the whole of Grupa Azoty.

PCC Rokita 2017

The PCC Rokita Group achieved an increase in net profit by 20% in 2017 to zl 182.4 million, whilst the gross margin remained around 28%.   The driving force in high profits came partly from the chlorine segment which generated an increase in EBITDA by 41.5% in 2017, and partly from polyol sales where the EBITDA rose 22%.  The chlorine division at Brzeg Dolny increased volume production by 12% in 2017. 

Due to higher demand and prices PCC Rokita reported an increase in revenues from the chlorine division by 26.7%.  Having converted to membrane electrolysis PCC Rokita is well positioned for chloralkali sales in markets where producers have stopped the production of chlorine or are in the process of switching to membrane technology.

Spolana Neratovice ended chlorine production at using mercury electrolysis in November 2017 and has yet to take a decision on building a new plant. 

The second producer in the region, which in 2017 produced lye in the older technology was the Slovak producer Fortischem, who decided to change the technology.  According to available market data, production was planned for the first quarter of 2018 at the earliest, but currently the company has no information on the commissioning of the installation.

PCC Rokita’s polyurethane division achieved a zl 2.6 million (22.3%) increase in EBITDA compared to 2016.  Despite the reduced demand for polyols due to the limited availability of TDI on the market, the segment achieved a 2.2% increase in total sales volume compared to 2016.  The revenues of the polyurethane segment accounted for approximately 50% of the group's revenues.  Due to higher prices in 2017, the segment recorded a 14% increase in revenues compared to 2016.   In the revenues of the polyurethanes segment, in 2017, exports accounted for over 58% and increased as compared to 2016 by 2 percentage points.  The main customers are located in Germany and Italy.

PCC Rokita raw materials

The strategic raw materials for the production of polyether polyols are propylene oxide and ethylene oxide, which account for 90% share of all raw materials.  Propylene oxide is met from 70% of its own production from the chlorine complex.  The remaining part is provided by external suppliers.  The main external supplier is Lyondell, the value of the contract exceeding 10% of annual total sales revenues.  At present, Lyondell's share in PCC Rokita’s supply of propylene oxide accounts for approximately 20%.

Propylene oxide is used by PCC Rokita for the production of polyether polyols in the polyol complex and flame-retardants in the phosphorous chemistry complex. The production of propylene oxide for the PCC Group takes place at Brzeg Dolny, based on the chlorohydrin method.  Most of the ethylene oxide is supplied by PCC Exol which is bought from PKN Orlen at Plock.  The estimated value of the contract is zl 930 million (contract for a value exceeding 10% of the company's annual revenues).

RUSSIA

Russian chemical production, Jan 2018

Russian ethylene production totalled 274,000 tons in January, compared to 267,500 tons in January 2018.  All the Russian ethylene producers operated at close to 100% of capacity utilisation. The production of benzene rose to 134,000 tons against 130,800 tons in January 2017.  January production of caustic soda was 113,000 tons versus 112,000 tons in the same month last year.

Production of mineral fertilisers totalled 2.019 million tons in January 2018 (in terms of 100% nutrients) versus 1.940 million tons in January 2017.  Ammonia production increased from 1.3 million tons in January 2017 to 1.6 million tons in January this year following expansions. 

Regarding the chemical trade balance, Russia’s deficit rose to $1.390 billion in January 2018 against $1.205 billion in January last year.  The structure of imports and exports differs sharply not only in reference to products but also source countries and destinations.  Less than 10% of imports in chemical products comes from other CIS countries whilst exports from Russia to those same countries account for around a third of total shipments.  

Siberian gas and petrochemical projects

The World Cup-Russian chemical production 2018

Domestic enterprises engaged in hazardous industries expect to continue to work during the World Cup this year.  In January this year, the Federal Security Service (FSB) began to warn Russian producers in the relevant regions about the possible need to stop working during the World Cup.

However, it has proved difficult to define hazardous materials due to different definitions of dangerous substances.  Producers have been busy explaining the reasons why they cannot suspend production.  

A number of producers in the Nizhniy Novgorod region have explained their positions, including the Kstovo refinery at Lukoil, SIBUR plants, Korund, etc.  Lukoil has stated that stopping production at the Kstovo refinery is impossible but the plant is ready to apply measures that will monitor the production status around the clock during the championship.  SIBUR-Kstovo is paying special attention to environmental requirements and its mobile environmental post will be used to monitor the state of atmospheric air during the competition.  Furthermore, Kaustik at Volgograd is prepared to strengthen industrial safety measures at its facilities to limit emissions but has no intention to stop production. 

Gazprom Amur GPP infrastructure schedule

At the start of this year Gazprom completed the first part of the railway bridge across the Bolshaya Pera River, which will facilitate delivery of equipment for the Amur Gas Processing Plant (GPP).  The length of the bridge is 252 metres and consists of eight supports and seven span structures.  The infrastructure investments include two railway stations Zavodskaya-2 (next to the operating station Ust-Pera) and Zavodskaya (next to the Amur Gas Processing Plant site), a 12-kilometre long haul between stations and an overpass over a section of the regional highway. 

A free customs zone regime has been created for the Amur GPP which could save up to 1.5 billion roubles ($26 billion) in supplying goods necessary for the project.  Work under the procedure of the free customs zone provides for full exemption from customs duties for the peak delivery of equipment arriving in 2018-2019.   

The Amur GPP is being designed to produce up to 2.6 million tpa of ethane and 1.6 million tpa of liquefied petroleum gases.  Other products included up to 60 million cubic metres of helium and up to 38 billion cubic metres of commercial gas per annum.  The gas processing plant, based on gas from the Chayanda and Kovykta deposits via the Power of Siberia pipeline, is scheduled to be commissioned in April 2021.  It is expected to reach full capacity of 42 billion cubic metres per annum by the end of 2024. 

Gazprom-helium sales

Gazprom has concluded long-term contracts for the supply of helium from the Amur Gas Processing Plant (GPP) with Linde.   At the beginning of 2018, Gazprom's subsidiary Gazprom Export completed the tender procedure, which was carried out in 2016-2017, to sell helium volumes from the Amur GPP.  Long-term contracts were signed with the largest companies in the world market of industrial gases. Assistance was provided by Gazprom Marketing and Trading.

The company intends to ship helium shipment through a helium hub linking with the ports of the Primorsky Kray.  The launch of the facility with the capacity of 60 million Nm³ per annum in terms of helium gas will be synchronized with the introduction of helium production at the Amur Gas Processing Plant.   The hub will include a complex of technological units designed to serve cryogenic iso-containers (used to transport liquid helium), as well as a liquefaction of helium.

Gazprom SIBUR ethane agreement

SIBUR hopes to secure supplies of around 2 million tpa of ethane from the Amur Gas Processing Plant (GPP) to feed the proposed Amur Gas Chemical Complex at Svobodny, but price has yet to be concluded with Gazprom.  

At this stage extended basic design of the gas-chemical complex is being undertaken and SIBUR is not expected to take a final decision whether to build the plant until 2019.  The complex includes a capacity for polyethylene with a capacity of about 1.5 million tpa.   SIBUR has specified that there is no specific deadline for launching the Amur Gas-Chemical Complex.  As the complex depends on Gazprom providing raw materials this will not happen after the launch of the fourth stage of the Amur GPP which could be 2024-2025.  

If SIBUR is to proceed with this project it would benefit significantly in cost and convenience from the infrastructure investments and developments undertaken by Gazprom in the construction process for the Amur GPP.  If the petrochemical complex at Svobodny is constructed, and other projects are implemented (taking the cautious view) Russian ethylene capacity could rise to 9.1 million tpa by the end of 2025 compared to around 3.4 million tpa in 2018. 

ZapSibneftekhim-financing and VEB

Russian state bank Vnesheconombank is ready to allocate $400 million from its funds to finance the SIBUR complex ZapSibNeftekhim under construction at Tobolsk.  In early 2018, it became known that VEB was to be included in the list of participants in financing the construction of ZapSibNeftekhim.  VEB will partially replace the financing of the project by commercial banks, reducing financing from $3.3 billion to $2.9 billion.  SIBUR’s own funds being used in the financing of ZapSibNeftekhim amount up to 57% of the project, with the National Welfare Fund allocated an amount equivalent to $1.75 billion. 

Irkutsk Oil Company, gas processing and petrochemicals

Irkutsk Oil Company (INK) is undertaking investments in natural gas and associated petroleum gas processing unit in preparation for the second stage involving a gas-chemical complex comprising polyethylene capacities of up to 600,000 tpa.  The raw material for production will be ethane, produced at the INK fields, whilst for the fuel for the power plant the company plans to use dry stripped gas from the Yarakta oil and gas condensate field.

Russian petrochemical producers & markets

SIBUR 2017

SIBUR increased revenue from the sale of marketable products by 10.4% in 2017.  The company's profit increased by 6.3% to 120 million roubles based on the increase in revenue which totalled 454.6 billion roubles.  Revenues in the fuel and raw materials segment increased by 7.9% to 184.2 billion roubles, whilst revenues from olefins and polyolefins increased by 1.5% to 88.1 billion roubles, due to increased capacity utilisation for the production of polypropylene and polyethylene.   

Revenues from plastics, synthetic rubber and intermediates rose more than other sectors in 2017.  The segment's revenue of plastics, elastomers and intermediate products increased by 12.4% to 146.9 billion roubles due to higher capacity utilisation and favourable market conditions.  The increase was mainly driven by elastomers performance where commodity rubbers made the largest contribution and by higher revenue from intermediates. 

A relatively stronger rouble in 2017 was a factor behind reducing revenues from export sales.   Adjusted EBITDA of the company increased by 13.1% to 168.7 billion roubles. The EBITDA in the fuel and raw materials segment increased by 47.6% to 89.4 billion roubles, which is due to the expansion of price corridors between netbacks for purchased hydrocarbon raw materials and international quotations for liquid hydrocarbons.  This growth was offset by a slight decrease in the petrochemical division due to the narrowing of price corridors.

Regarding petrochemical production, SIBUR’s largest rises in 2017 came from isobutylene and butadiene, whilst ethylene experienced a slight fall due to maintenance at Kstovo and Tomsk.  SIBUR’s revenues from plastics, elastomers and intermediates increased by 12.4% in 2017 to 146.877 billion roubles from 130.690 billion in 2016. 

The net profit of SIBUR in 2017 increased by 6.3% and amounted to 120.2 billion roubles. The increase is mainly due to the growth in operating profit and profit from the sale of Uralorgsintez. These factors were partially offset by a decrease in net financial income when there were significant fluctuations in exchange rates.

Capital investments of SIBUR decreased by 7% in 2017 compared to 2016 and amounted to 135.3 billion roubles.  This was mainly as a result of the dynamics of exchange rates, which reduced the rouble equivalent payments on contracts for the project ZapSibNeftekhim.  At the end of 2017 SIBUR was left with $4.2 billion to pay for the remaining project costs for the ZapSib-2 project at Tobolsk.  Other projects being undertaken by SIBUR include the maleic anhydride plant at Tobolsk and plasticizer DOTP plant at Perm. 

Russian petrochemical markets

Russian ethylene & propylene, Jan 2018

Russian ethylene production rose 11% in January against December 2017 to 273,500 tons.  Almost all Russian plants increased the production of ethylene, aside SIBUR-Khimprom and Angarsk Polymer Plant.  SIBUR-Khimprom at Perm reduced ethylene production by 7% to 4,800 tons in January, whilst Angarsk Polymer Plant dropped slightly to 19,800 tons from 20,000 tons.  Stavrolen reported a rise of 27% over December to 28,400 tons whilst Novokuibyshevsk Petrochemical increased production by 18% to 6,100 tons.  Regarding prices for olefins the trend in recent months has been upward, although ethylene dropped slightly in January.

Russian plants produced 215,200 tons of propylene in January, 1% more than in December 2017.  The small rise was mainly due to the increase in capacity utilisation at Stavrolen, rising 21% to 11,600 tons.  In addition, propylene production at Nizhnekamskneftekhim and Titan at Omsk increased to 28,800 tons and 21,500 tons respectively. Ufaorgsintez reduced the monomer output by 7% to 15,500 tons.

Russian propylene sales, Jan-Feb 2018

In the first two months in 2018 Russian sales of propylene on the domestic market totalled 68,100 tons against 67,800 tons in the same period in 2017.   Lukoil-NNOS provided 34,600 tons versus 38,800 tons in the same period in 2017, whilst SIBUR-Kstovo increased shipments from 12,200 tons to 20,400 tons. 

In the first two months in 2018, 27,200 tons of propane-propylene fractions were shipped to the Russian domestic market, 3% less than in the same period of 2017.  Whilst the main suppliers of fractions included the Ryazan refinery and Slavneft at Yaroslavl Lukoil-NNOS revived shipments supplying a thousand tons from Kstovo in February.

Russian plants exported 12,500 tons of propylene in January, 14% less than in December 2017.  Belarus and the Netherlands took 6,200 tons each in January.  SIBUR-Kstovo reduced propylene supplies by 45% to 3,600 tons, whilst Lukoil-NNOS increased shipments by 11% to 8,900 tons of propylene.  Exports of propane-propylene fractions dropped 14% in January to 6,800 tons.   The Ryazan refinery increased exports by 17% to 6,500 tons. 

Russian styrene domestic sales, Jan-Feb 2018

Styrene sales on the Russian domestic market rose 24% in February to 9,400 tons.  SIBUR-Khimprom was forced to reduce shipments in February due to an accident, down from 2,500 tons to 560 tons.  In addition, SIBUR purchased 2,600 tons of monomer from Nizhnekamskneftekhim and 292 tons from Angarsk Polymer Plant.  Angarsk Polymer Plant sold 1,300 tons of styrene in the domestic market in February against 423 tons than in January.  Gazprom neftekhim Salavat increased shipments in February from 4,100 tons to 4,700 tons.  For the first two months in 2018, Russian petrochemical companies sold 16,400 tons of styrene, which is 21% more than in the same period in 2017.

Russian styrene exports & promotion, Jan 2018

In January 2018, 13,000 tons of styrene were exported from Russian producers which is 11% down on December. The decrease in volumes was due to lower exports by SIBUR-Khimprom, dropping by four times to 493 tons.  In addition, Gazprom neftekhim Salavat reduced monomer exports by 7% to 10,700 tons.  Angarsk Polymer Plant increased the supply of styrene abroad by 32% to 1,800 tons, which is 32% more than in December 2017.  The increase in exports from Angarsk was due to the rise of quotations in the Asian market.

In January in Russia produced 63,200 tons of styrene, which is 3.5% less than the previous month.  SIBUR-Khimprom produced 10,700 tons of styrene in January, 23% down against December, following an accident.  At the same time, Plastik increased production by 26% to 5,700 tons Nizhnekamskneftekhim reduced production by 5% to 25,900 tons.  Gazprom neftekhim Salavat increased production by 6% to 17,700 tons. 

Bulk Polymers

Russian HDPE/LLDPE imports 2017

LLDPE imports into Russia dropped by 27% in 2017 to 160,000 tons, due to the rise in production by Nizhnekamskneftekhim.  Production of LLDPE at Nizhnekamsk totalled 140,600 tons in 2017 which was 69% more than in 2016. 

Russian polypropylene production, Jan 2018

Russian polypropylene production in Russia increased by 4% in January, vis-à-vis January 2017, and amounted to 131,300 tons against 125,700 tons.  SIBUR Tobolsk produced 47,700 tons against 46,400 tons in January 2017, Polyom was unchanged at 18,500 tons whilst Nizhnekamskneftekhim reduced production to 18,300 tons against 18,700 tons.  Tomskneftekhim increased capacity utilisation in January, produced 12,700 tons versus 12,000 tons in December.   Ufaorgsintez increased to 11,600 tons versus 10,800 tons.  Neftekhimiya increased from 9,600 tons to 12,300 tons and Stavrolen from 9,500 tons to 10,200 tons.

Russian PVC production, Jan 2018

Russia’s PVC production amounted to 89,800 tons in January 2018, up 14% against January 2017.  RusVinyl produced about 31,200 tons of PVC in January, of which 2,800 tons was emulsion grade. The overall PVC production at RusVinyl in 2017 totalled 312,700 tons.  Sayanskkhimplast produced 27,100 tons of PVC in January against 22,900 tons in January 2017 and 24,800 tons in December 2017. Total PVC production at Sayanskkhimplast in 2017 was 263,500 tons.

Bashkir Soda Company produced 23,300 tons in January, compared with 22,700 tons in January 2017 and 22,100 tons in December 2017.  Total PVC production at Bashkir Soda Company in 2017 was 243,000 tons.  Kaustik at Volgograd in January slightly decreased production to 8,000 tons compared with 8,200 tons in January 2017 and 8,100 tons in December 2017.  Total PVC production at Kaustik in 2017 amounted to 87,000 tons.

Kaustik 2017

Kaustik at Volgograd increased revenues by more than 30% over the past year.  Export of resin grew by more than 45%.  Kaustik increased the export of caustic soda in 2017 by 9.1% in monetary terms, whilst PVC increased by 46.6% and household chemical goods by 6%.  Revenues from the sale of magnesium compounds grew more than 6.5 times.  The company's revenue increased by 32.5% in 2017. 

Russian ABS imports, Jan 2017

in January ABS imports to Russia totalled 2,830 tons, which is 944 tons more than in January 2017.  In 2017, ABS imports to the Russian market increased by 5% to 30,300 tons against 29,00 tons a year earlier.

Russian PTA-PET

Russian PTA imports and duties extended to 2020

PTA imports into Russia totalled 232,500 tons in 2017 against 119,900 tons in 2016.  China was the largest supplier, providing 85,500 tons against 36,500 tons in 2016.  Other important suppliers included Belgium, India, South Korea and Thailand.   India increased exports to Russia from 4,000 tons in 2016 to 37,200 tons in 2017, whilst Thailand increased shipments from 1,600 tons to 37,700 tons.   Import costs for PTA in 2017 totalled $199.8 million, equating for around $750 per ton.  Prospects for 2018 suggest a similar volume of PTA being imported. 

Polief is the only current producer of PTA and is expected to increase capacity in 2019 to 350,000 tpa.  However, there is a risk of overproduction of PTA in China and the possibility of cheaper imported product being sold on the market.   

The Council of the Eurasian Economic Commission has decided to extend the zero rate of the import customs duty on PTA until to 31 December 2019.  Earlier, the rate was reduced from 5% to 0% by the decision of the Council of the ECE for the period from 1 January 2016 to 31 December 2017 inclusive.  This will affect both Russia and Belarus. 

PTA consumption in the Eurasian Customs Union is estimated to comprise around 500,000 tons, roughly broken down into 60% production and 40% imports.  The extension of the zero-rate period of the import customs duty will support the end producers and increase their competitiveness.  The main consumers of PTA include Polief, SIBUR-PETF, Senezh Plant of New Polymers, Alko-Nafta, and Mogilevkhimvolokno.  In the next few years, production units are planned for Tatarstan and Kabardino-Balkaria, although only the project in Tatarstan is currently setting up its raw material base.  

Taneko, aromatics start-up

Taneko is close to starting the production of benzene and high-purity paraxylene after a raffinate column is being installed at the Nizhnekamsk site intended for a complex for the production of aromatic hydrocarbons.  The column was manufactured by Russian company NATEK-Neftekhimmash at Taganrog.  It is designed to separate non-extracted aromatic compounds C8 from the desorbent.  Raising the raffinate column will allow the installation of subsequent equipment to be installed in other sections of the aromatic hydrocarbon production complex.  Taneko will provide future production of PTA and PET in 2019 under the management of Safpet. 

Russian PET market 2017

In Russia, 540,000 tons of PET were produced in 2017, and consumption was 610,000 tons.  The leading producer is Polief (40%), followed by Alko-Naphtha (29%), Senezh ( 17%) and SIBUR-PETF (14%).

The PET market is characterized by high dependence on packaging, mainly in bottling of water and beverages.  In conditions of low demand, the emergence of new PET production facilities in Tatarstan and Kabardino-Balkaria and the production of their products to the free market will significantly reduce the margin of existing producers.  Under these conditions, it will be easier to survive by enterprises with the cheapest processing.

Almost all PET-fibre and non-woven materials produced in Russia are produced from waste PET bottles.  The number of projects for separate waste collection is increasing, and products made using recycled polymers are widely used in various industries.  Demand for polyester fibre is growing (+12.5% ??in 2017), but the share of imports is still overwhelmingly high (more than 60%).  In this regard, the launch in the first quarter of 2020 of domestic production of fibre is of particular importance. 

The consumption of secondary PET (in the form of PET flakes) in 2017 amounted to 151,000 tons in 2017 of which 136,000 tons came from domestic production.  In terms of trade, 16,000 tons was imported and exports accounted for 877 tons.  Import sources of PET flakes for the production of polyester fibre include Ukraine, Belarus, Lithuania, and Azerbaijan. 

Aromatics

Russian benzene production, Jan-Feb 2018

Russian plants produced 123,100 tons of benzene for synthesis and nitration in January, which is 10% in more than in December 2017.  The increase in production is mainly due to an increase in capacity utilisation at Gazprom enterprises. 

Gazprom neftekhim Salavat increased output by 17% to 20,200 tons, whilst Gazprom Neft at Omsk 12,500 tons of benzene for synthesis in January, which is 31% more than in December 2017.  Stavrolen produced 1,500 tons of benzene in January after being idle in December, whilst the production of benzene at Ufaneftekhim declined by 13% to 7,400 tons.

Stavrolen’s benzene production has been intermittent in the first couple of months in 2017.  When available, the company supplies benzene mostly to Kuibyshevazot.  

Russian benzene sales, Jan-Feb 2018

In February, 78,600 tons of benzene were shipped to the domestic market against 77,800 tons in January.   In February, Severstal shipped 2,300 tons of benzene for synthesis, which is 28% less than in January.  Uralorgsintez shipped 7,100 tons against 8,800 tons in January.  Stavrolen last month resumed the production of benzene, shipping 5,800 tons which went to Kuibyshevazot (in January 1,900 tons).  In addition, in February, shipment of benzene to Ufaneftekhim was increased 3.5 times to 2,300 tons.  In the first two months in 2018 Russian companies sold 130,300 tons on the domestic market which is 17% more than in the same period of 2017.

In February, Kirishinefteorgsintez remained the only exporter of domestic benzene for synthesis.  The company shipped 2,300 tons of benzene abroad, which is 9% less than in January. All of the benzene exported from the Kirishi plant was shipped to the Netherlands. In the first two months in 2018, Russian petrochemical companies exported 4,800 tons of benzene, which is five times less than in the same period in 2017.  At the start of the year market consensus indicated that export shipments would be lower in 2018 partly due to higher domestic sales.  

Russian orthoxylene sales, Jan-Feb 2018

Kamteks-Khimprom reduced purchases of orthoxylene by 20% in February over January to 7,090 tons, whilst Gazprom neftekhim Salavat reduced purchases by 48% to 540 tons.  Dmitrievsky Chemical Plant increased purchases by 43% to 260 tons (2%). 

At the same time, Russian manufacturers of paint and varnish materials increased the volume of purchased orthoxylene in February by 20% to 2,300 tons (20% of gross consumption).  Manufacturers of fuel, agrochemistry, pharmaceutical and other products purchased 1,590 tons (13%).  In the first two months of 2018, orthoxylene sales to the domestic market totalled 25,100 tons against 25,800 tons in the same period in 2017.   

Russian toluene sales, Jan-Feb 2018

Toluene sales on the Russian domestic market dropped 11% in February against January to 10,730 tons.  After s very successful 2017 the Russian toluene market took a surprising drop in the first two months in 2018.  Gazprom Neft supplied 47% or 5,040 tons, Slavneft-Yaroslavnefteorgsintez 23% or 2,450 tons, Lukoil-Permnefteorgsintez 14% or 1,450 tons and Kirishinefteorgsintez 13% or 1,410 tons. 

Manufacturers of explosives reduced purchases of toluene by 15% in February to 990 tons whilst enterprises producing paint and varnish materials increased toluene purchased raw materials by 4% to 3,300 tons (31%).  Manufacturers of motor fuels and additives to them increased purchases of toluene by 19% to 3,460 tons (32%).   For the first two months in 2018 sales of toluene on the domestic market totalled 22,820 tons which was 12% down on 2017.

Russian phenol production, Jan 2018

In January 2018, the production of phenol in Russia declined by 13% to 16,300 tons.  Kazanorgsintez produced 6,500 tons, Ufaorgsintez 4,700 tons and Novokuibyshevsk Petrochemical 5,000 tons.  Of the producers Ufaorgsintez is currently upgrading its cumene process, whilst Omsk Kaucuk’s idle and revamped phenol-acetone plant could be restarted in 2019. 

Russian phenol, Jan-Feb 2018

Phenol sales on the Russian domestic market dropped 25% in January against December to 9,100 tons.  Ufaorgsintez supplied 4,600 tons in January, Novokuibyshevsk Petrochemical 3,800 tons and Kazanorgsintez 710 tons.  The main consumers in January were the domestic producers of phenol-formaldehyde resins, taking 7,400 tons.  The domestic producer of antioxidants, and Sterlitamak Petrochemical Plant reduced volumes of phenol purchases by 13% in January to 845 tons.  The domestic producer of alkylphenols, Nizhnekamskneftekhim, increased the purchase of phenol by 23% to 730 tons.

Phenol sales on the Russian domestic market rose 5% in February to 9,500 tons.  Novokuibyshevsk Petrochemical Company delivered 4,000 tons of products via railway transport in February to its domestic consumers, which is 6% more than in January.  Ufaorgsintez reduced shipments to 4,700 tons, and the remaining 765 tons was supplied by Kazanorgsintez.

Phenol-formaldehyde producers purchased 8,000 tons of phenol in February, 8% up on January.  Manufacturers of oils and additives resumed the consumption of phenol in February and purchased about 120 tons, or 1% of the total domestic product sold.  The domestic producer of antioxidants, Sterlitamak Petrochemical Plant, bought 750 tons of phenol which is 12% less than in January. Kuibyshevazot bought only 63 tons (1%) in February, half as much as in January.  Nizhnekamskneftekhim purchased 620 tons in February for alkylphenol production which is 16% less than in January 2018.

Kuibyshevazot-fourth polyamide line starts

Kuibyshevazot started the fourth line for polyamide-6 on 2 March 2018 in accordance with the development of caprolactam processing.  The new plant's capacity is 160 tons per day or 58,400 tpa of polyamide-6 for the production of films, filaments and fibres, as well as engineering plastics.  The launch of new equipment will allow the company to increase the total capacity of polyamide-6 to 212,000 tpa.  The total amount of investments in the construction project of 5 units at all stages amounted to 2 billion roubles.  Financing was carried out at the expense of the company's own funds and borrowed resources.

Synthetic Rubber

Russian C4s, Jan-Feb 2018

Russian C4 shipments dropped 12% in February against January to 28,500 tons.  Angarsk Polymer Plant last month they shipped only 1,400 tons of C4s, 35% less than in January.  In addition, last month the deliveries of C4s from Kazanorgsintez decreased by 16% to 3,600 tons.  In two months of 2018, Russian companies sold 61,000 tons, which is the same as in 2017.

Deliveries in February dropped to 32,800 tons of which the largest suppliers comprised SIBUR-Kstovo, Tomskneftekhim and Stavrolen.   C4 purchases by domestic synthetic rubber producers in the first two months in 2018 totalled 74,700 tons against 71,900 tons in the same period in 2017.  SIBUR-Togliatti was the largest consumer, increasing purchases from 31,390 tons to 34,656 tons followed by Nizhnekamskneftekhim which increased purchases from 29,149 tons to 31,777 tons. 

Russian synthetic rubber production & exports

Russian synthetic rubber production amounted to 147,000 tons in January 2018 against 152,000 tons in the same month in 2017.  Exports totalled 91,000 tons in January against 88,000 tons in January 2017.  Average prices rose slightly from $1557 per ton in January 2017 to $1660 per ton in the first month in 2018.  Both Nizhnekamskneftekhim and SIBUR have forecast a tighter year for rubber margins.  

Omsk Kaucuk increased its share in the Russian market of butadiene-methylstyrene rubbers SKMS by 1% to 27% in 2017.  In total, the company produced 53,000 tons of this grade of rubber, which is 14% higher than in 2016.  Russian production of SKMS totalled 220,000 tons in 2017.

Russian synthetic rubber exports, Jan-Dec 2017

Synthetic rubber exports from Russia totalled 1.022 million tons in 2017 against 984,000 tons in 2016.  The largest category of exports, isoprene rubber, increased from 275,900 tons to 302,900 tons whilst polybutadiene exports rose from 236,500 tons to 240,000 tons.  Other volume rubber exports included halogenated butyl rubber and butyl rubber, both of which increased in 2017.  In terms of destinations, Poland, India and China were the three largest markets for Russian synthetic rubber exports, whist East Europe provides the largest region for Russian exports. 

Imports into Russia of natural and synthetic rubber totalled 203,000 tons in 2017, against 217,000 tons in 2016.  For further information on Russian synthetic rubber market, regarding production, prices and trade please contact us or visit our website www.cirec.net.

SIBUR synthetic rubber division 2017

Synthetic rubber sales revenues for SIBUR increased by 31.5% in 2017 to 51.857 billion roubles from 39.421 billion in 2016.  The rise was largely due to a 20.0% increase in prices, as well as a 9.7% increase in sales volumes.  The increase in prices was mainly driven by commodity rubbers where favourable market environment in Asian markets, mainly in the first half of 2017, was reflected in higher international benchmarks, and thermoplastic elastomers in Europe.  In 2017, export sales accounted for 63.6% of SIBUR’s revenues from synthetic rubber, while 36.4% was attributable to domestic sales.

SIBUR Togliatti remains the main site for synthetic rubber production. Followed by Voronezhsintezkaucuk.  Thermoplastic elastomers are produced at Voronezh, where production increased to 77,800 tons in 2017 from 73,300 tons in 2016.  The interesting aspect about SIBUR’s sales of thermoplastic elastomers in 2017 was that it was the first year that domestic sales exceeded exports.  In 2017 domestic sales totalled 43,600 tons against 33,900 tons in 2016 whilst exports dropped from 38,800 tons in 2016 to 35,100 tons in 2017. 

Rubber prices increased by 20% in 2017 compared to the previous year, and SIBUR also increased production by 10%.  The prospects for 2018 are less promising due to expected rises in butadiene prices.  The significant increase in sales and profits of the segment of synthetic rubbers, which was recorded by SIBUR in 2017, may not be repeated this year. 

Russian tyre production & expansion

Russian car tyre production rose 13% in January 2018 against the same month last year to 3.2 million pieces.  This increased domestic consumption of rubber from 23,300 tons in January 2017 to 26,700 tons. 

In Russia, the production of tyres by 2020 is forecast to rise by around 30% due to new investments.  The share of imports in consumption is thus expected to fall and the export of Russian tyres is to rise. 

The difficult issues in pushing through this programme of expansion are related to the regulations on the safety of chemical products, including components of tyres.  The tyre manufacturers will have to guarantee the safety of these components, which implies a rather complicated procedure for state registration.  In 2017 the Russian tyre market was worth about 52 million tyres were sold, and the market should be higher in 2018.  However, the main focus of Russian tyre investments is on export activity.    

Omskshina (part of the Kordiant holding company) plans to invest in the modernisation of plant preparation of rubber compounds to 3 billion roubles.  The key objective of the project development of the production of rubber compounds with high silica content for passenger and light truck tires hi-tech.  The inclusion of this product in the tyres allow the company to improve the quality characteristics of finished goods: to increase the coefficient of adhesion of tyres on wet and snow-covered road, decrease of carbon consumption in the production, which has a positive impact on environmental performance.  

Methanol

Russian methanol, Jan 2018

Methanol production in Russia dropped 2% in January against December to 364,700 tons, although was higher than in January 2017 at 350,600 tons.  Azot at Novomoskovsk increased production by 23% in January to 25,900 tons, whilst Ammoni at Mendeleevsk rose 4%to 19,000 tons and Sibmetakhim rose 1% to 85,900 tons.  Metafrax and Akron stabilized production in January, producing 104,500 tons (29% of Russia's gross production) and 9,300 tons respectively.  Regarding producers reporting lower production, Azot at Nevinnomyssk dropped 23% in January to 8,800 tons, followed by Shchekinoazot with a 20% drop to 37,600 tons and Tomet by 2% to 73,600 tons. 

Russian methanol sales, Jan-Feb 2018

Russian domestic sales of methanol amounted to 124,000 tons in February, 7% less than in January at 134,000 tons. The largest increase was undertaken by Tomet by 3% to 48,000 tons.  Ammoni increased shipments by 10% to 16,300 tons whilst Tomet increased by 2% to 46,700 tons.  The largest fall in methanol sales volumes in February 2018 was recorded by Azot at Nevinnomysk which shipped 43% less at 640 tons.  A smaller decrease was demonstrated by other domestic producers: Shchekinoazot (almost 30%), Metafrax (20%), Ammonium (16%), Azot Novomoskovsk (10%) and Sibmetakhim only 3%).  

At the same time, in February Shchekinoazot shipped 3,600 tons of methanol, or 4% of its gross sales in the country, Metafrax 16,900 tons or 16%, Ammoni 13,700 tons, or 12%, Azot 11,700 tons, or 10%, and Sibmetakhim 29,600 tons or 23%.

For the first two months in 2018 methanol sales on the domestic market totalled 257,800 tons and 262,200 tons.  Nizhnekamskneftekhim reduced purchases in the first two months to 28,500 tons from 43,700 tons in January-February 2017 whilst SIBUR Togliatti increased purchases from 19,900 tons to 25,900 tons. 

Metafrax-AKM project

Metafrax has officially started the construction of an industrial complex for the production of ammonia, urea and melamine (AKM).  Project Institute NIIK at Dzerzhinsk signed a contract in March with Turkish company Stellar for the AKM project being undertaken by Metafrax.  The total amount of contracts with Russian companies amounted to 33.5 billion roubles.

Metafrax by 2021 aims to complete the AKM complex on the basis of a purge gas produced by methanol.  The total investment in the project is estimated at 58 billion roubles.  The project involves capacities of 575,000 tpa of urea or 460,000 tpa, 308,000 tpa of ammonia or 330,000 tpa and 41,000 tpa of melamine or 44,000 tpa.  The payback period of the project has been estimated at 13 years.  The production of ammonia is planned to be carried out using technology that excludes the use of natural gas.  Purging gases from methanol production will be used instead which will reduce emissions and increase energy efficiency. 

The new production complex will be technologically connected with the methanol unit and its material flows of raw materials and energy resources.  Most of the products are planned to be used for the company’s own production of urea-formaldehyde concentrate and synthetic resins.  Regarding sales, the intention is to ship urea from Gubakha for export through the Finnish port of Kotka. 

Shchekinoazot-third methanol unit scheduled for completion in 2022

Shchekinoazot has targeted the launch of its third methanol unit with a capacity of 500,000 tpa in the second quarter of 2022.  This will add to the existing M-450 plant and the M450/A135 complex that is set for completion in 2018.  Shchekinoazot started the project for the third methanol plant in the fourth quarter of 2016 after signing a technology license with Haldor Topsoe.

Over the next two years Shchekinoazot plans to prepare a site for the construction of a new methanol plant.  Over the same period, it is planned to conduct engineering surveys on the project, develop a basic project and prepare project documentation, pass state expertise and obtain a building permit.  The management of the company believes that, despite the complexity of the methanol market in Russia and in Europe, this project will experience reasonable payback periods.

The company adds that the investment project Methanol M-500 Installation involves the introduction of the latest technological developments in the chemical industry: purification of emissions from nitrogen oxides, a reduction in specific energy consumption and the consumption of raw materials.  As a result of the investment Shchekinoazot’s methanol capacity will rise to 1.4 million tpa by 2022.

Ammoni-losses

Ammoni at Mendeleevsk is facing debts estimated seven times higher than annual revenues and product prices are failing to meet the business plan.  The company is trying to repay a loan of $1.67 billion, but there is a real risk that it will be not able to fulfill obligations to VEB.   The main reason for the problems is a high debt load on the foreign currency loan and unfavourable market conditions, particularly for urea. 

After the transfer of Mendeleevskazot to Ammoni and the modernisation of old sites, which cost about 480 million roubles, the plant was able to increase the production of its own electricity, which gave an economic effect of 61.7 million roubles a year. Work on resource saving saved natural gas by 118 million roubles, electricity by 52.5 million roubles, and ammonia by 4.2 million roubles.

Despite current performance indicators, the enterprise is unprofitable.  Moreover, the enterprise has a real risk of breaking debt obligations to VEB.  Ammoni's big problems arose as a result of changes in the Tax Code, which limited the amount of the transferred loss on income tax.  

Togliattiazot 2017

Togliattiazot decreased ammonia production by 7% in 2017 to 2.642 million tons, whilst urea rose 30.9% to 434,000 tons.  Ammonia production dropped due to the inability to transport products along the Ukrainian part of the main ammonia pipeline Togliatti-Odessa at the start of 2017.   The production facilities of Togliattiazot allow the production of more than 3.0 million tpa and about 960,000 tpa of urea.

Organic chemicals

Russian butanols domestic market 2017

In 2017 Gazprom neftekhim Salavat significantly reduced the supply of butanol to domestic consumers, whilst Angarsk Petrochemical filled part of the market void by reducing export activity.  Not only did Gazprom neftekhim Salavat reduce domestic sales of normal butanol, due to the feedstocks required for butyl acrylate but production was also lower in 2018.  The Salavat plant decreased production by 28% to 83,200 tons which was due to a limited amount propylene.  Thus, the shipment of butanols to the Russian market with

Gazprom neftekhim Salavat at the end of 2017 amounted to 8,610 tons which was 2.8 times less than in 2016 at 24,040 tons.  The export of products of the Salavat plant also declined significantly in 2017 by 3.9 times to 15,950 tons.

Angarsk Petrochemical Company significantly increased the production of butanols after a sharp decline in 2016.  After a sharp fall in 2016, the Siberian producer increased the output of butanol more than 14 times to 47,140 tons.  The plant is located far from the main domestic consumers of alcohols, but near the border with China.  With the development of butanol production in China, the demand for Russian oxo alcohols in the Asian region has declined.  This has been a growing trend in recent years and in 2015 production was reduced as a result.  In 2016, production at Angarsk reached a historic low but in 2017 was ramped up due to the gaps in the market left by Salavat.

In total, in 2017, exports of butanols from Russia amounted to 38,550 tons which is 2.3 times less than in 2016.  Largely as a result of increased domestic demand Russia reduced exports of normal butanol from 61,700 tons in 2016 to 17,500 tons in 2017.  Exports of isobutanol increased from 21,100 tons in 2016 to 27,400 tons whilst 2-ethylhexanol exports dropped to 20,200 tons from 35,300 tons in 2016.  

Russian butanol production, Jan 2018

Russian production of butanols dropped 9% in January to 24,390 tons.  The share of n-butanol in the gross volume of butanols production in January 2018 was 61%, and isobutanol 39%.  Gazprom neftekhim Salavat reduced butanol production by 2% compared to December to 9,350 tons (38% of the total Russian volume), whilst SIBUR-Khimprom decreased production by 11% to 9,010 tons (37%).   Angarsk Petrochemical Complex reduced production by 10% to 5,110 and Azot Nevinnomyssk by 40% to 920 tons (4%). 

Russian butanol domestic sales, Jan-Feb 2018

Domestic butanol deliveries to the Russian market amounted to 7,380 tons in February 2% less than in January and 61% higher than in February 2017.  The share of n-butanol in the gross sales volume in February 2018 was 93%, and isobutanol 7%.

Volumes of shipments of alcohols from SIBUR-Khimprom to the domestic market in February decreased by 26% compared to January to 3,180 tons (43% of the total Russian supply).  The Angarsk Petrochemical Plant reduced butanol deliveries in February by 29% to 2,100 tons, whilst Gazprom neftekhim Salavat increased by 8.7 times to 2,100 tons (28%).  Around 97% of the total n-butanol shipped from the Salavat plant was supplied to the Dmitrievsky Chemical Plant, and the remaining 3% to the Volzhsky Orgsintez.

Regarding consumers, Akrilat increased purchases of butanols by 7% to 1,860 tons (25% of total Russian consumption).  At the same time, the Dmitrievsky Chemical Plant increased purchased raw materials butanols by 2.2 times to 3,150 tons (43%).  

Volzhsky Orgsintez in February reduced purchases by 2% to 690 tons (9%).  In the first two months in 2018 sales of butanols to the domestic market totalled 14,890 tons which was 61% up on the same period in 2017. 

SIBUR-DOTP project

The construction of the dioctyl terephthalate (DOTP) plant in accordance with the schedule.  The project is implemented in partnership with the Perm Krai within the framework of a special investment contract, signed for a period of eight years and comprising a production capacity of 100,000 tpa.   The launch is scheduled for 2019.  The licensed technology is the Korean company Aekyung, whilst Russian company NIPIGAS was chosen as the general designer.  Construction and installation and commissioning work will be performed by Russian contractors.

The plant is scheduled for completion by December 2018.  According to SIBUR, the deficit of the Russian market of basic plasticizers is about 60,000 tpa.  The implementation of the project will largely replace the import of similar products and begin to supply plasticizers to export markets, where demand for DOTP also grows.

Other organic chemicals

Acrylonitrile exports from Russia totalled 126,428 tons in 2017 against 125,985 tons in 2016.  Organic chemicals which reflected large increases from Russia in 2017 included butyl acetate, which rose from 8,900 tons to 26,100 tons and acrylate esters which rose from 8,900 tons to 43,000 tons. 

Russian pentaerythritol exports rose from 9,000 tons to 10,700 tons.  Pentaerythritol production in February by Metafrax (the only Russian producer of this product) amounted to 1,900 tons.  This is 7% less than in January, and corresponds to the February 2017 figure.  In the first just two months of 2018 in Russia produced 3,950 tons of pentaerythritol which was unchanged from 2017. 

Ural Plasticizers Plant-Sberbank

Ural Plasticizers Plant has received a loan of 150 million roubles from Sberbank for the development of production, acquisition of non-current assets, purchase of equipment for compounding and granulation of soft PVC.  This transaction was coordinated through the Ministry of Economic Development of Russia, including an interest rate for borrowers is 6.5%, there are no additional commissions and fees.  Sberbank has been entrusted to provide loans to small and medium-sized businesses in priority sectors at a reduced rate.  In 2014, the Ural Plasticizers Plant began construction of a workshop to produce cable compounds, and started the production of PVC-plastics in 2016.  Ural Plant of Plasticizers produces plasticizers such as: dioctyl phthalate (DOP), dioctyl adipate (DOA), dioctyl sebacate (DOS), dibutyl sebacate (DBS), dibutyl phthalate (DBP) and diisobutyl phthalate (DIBF).  

Russian phthalic anhydride, Jan 2018

Phthalic anhydride production in Russia amounted to 9,590 tons in January, 4% more than in December last year.  In January 2018, Kamteks-Khimprom produced 8,500 tons and Gazprom neftekhim Salavat 1,090 tons.  Exports of phthalic anhydride from Russia amounted to 6,340 tons, 64% more than in November.  Egypt took 34% of total supplies from Russia, India (22%), UAE (10%), Poland (10%) and Tunisia (6%).  For the whole of 2017 Kamteks-Khimprom exported 51,270 tons which is 32% more than in 2016.

Other products

Nizhnekamskneftekhim, oligomers-EO plants merged

Nizhnekamskneftekhim has merged its factories for the production of oligomers and ethylene oxide, creating a joint plant.   The reorganisation was carried out to improve the management structure.  Currently, the plant produces ethylene oxide, ethylene glycols, ethyl carbitol, ethyl cellosolve, neonols, trimers, tetramers of propylene, alpha-olefins, polyethers, polyethylene glycols, triethylaluminum, triisobutylaluminum.  The company is increasing the production capacity of triisobutyl aluminum (TIBA), and is to launch a new production of a microspherical alumina chromium dehydrogenation catalyst for isoparaffins KDI-M.  The Implementation of projects to expand the range of oxyethylated products, including methoxypolyethylene glycol (MPEG) and triethylene glycol (TPEG).

Polyacrylamide plant-Saratov

The administration of the Saratov region and the French company SNF have signed an agreement on the execution of the next stage of the project to build a plant for the production of acrylamide.  Under the agreement, the region will create conditions for the implementation of the investment project SNF and Lukoil.   Construction of a plant for the production of acrylamide and polyacrylamide with a capacity of up to 60,000 tpa with the possibility of expanding to 150,000 tpa. 

Construction of the SNF Vostok plant on the Saratovorgsintez site was to begin in 2014, and in 2016 it was planned to receive the first products.  At the time of the investment decision, the project cost was estimated at €50 million.  The laying of the first stone in the foundation of the new production took place only in May 2016. The plant will house two workshops for the production of acrylamide and four for the production of powdered polyacrylamide. 

Saratovorgsintez operates acrylonitrile production capacity of 150,000 tpa and sodium cyanide capacity of 48,000 tpa.  Lukoil is exploring the use of polyacrylamide in chemical EOR technologies, which could mean increased usage of acrylonitrile for domestic consumption.  Other applications could include water purification and waste water treatment and agriculture. 

Russian isocyanates 2017

Elastokam (Nizhnekamsk, a joint venture between BASF and Nizhnekamskneftekhim) reduced isocyanate purchases by 29% in 2017.  In 2017 Elastokam imported 10,000 tons of isocyanates against 14,000 tons in 2016 and 22,000 tons in 2016.  Lower delivery in 2017 was largely the result of BASF selling isocyanates to Asia rather than Russia.

The rise in prices for isocyanates experts attributed to the decline in production in Asia. Over the past year, the cost of TDI has grown by 40%, and MDI by more than 60%. In 2000, Nizhnekamskneftekhim and Elastogran (a subsidiary of BASF) established the Elastokam joint venture, the main activity of which is the production of polyurethane systems.

Russian polyols 2017

Import supplies of polyols to Russia increased by 25% in 2017.  Overall demand rose from 150,000 tons in 2016 to 166,000 tons in 2017.  The increased demand was covered by imports which rose to 79,000 tons against 63,000 tons in 2016.  External supplies of polyesters (excluding imported powdered polyurethane paints) remained at the level of 2016 and amounted to 7,000 tons.  In general, the share of imports in Russian consumption in 2017 increased to 52%.

Out of 79,000 tons of imported polyols 29,000 tons comprised high-molecular triols for elastic foam, 25,000 tons for low-molecular polyols for rigid foam, and 12,000 tons compositions of special purpose polyols.  Another 11,000 tons comprised linear polyols and 4,000 tons polymer polyols for elastic foam.  The main consumers of imported products include companies Dow Izolan (21%), Trans-Nord (15%), Vladipur (12%), and Huntsman (8%).

Volzhsky Orgsintez-potassium xanthate

Volzhsky Orgsintez produced a trial lot in the amount of 300 tons of amyl potassium xanthate, which is suitable for gold-containing ores.  The capacity of the enterprise will suffice for the full satisfaction of the needs of the Russian and CIS markets in the gold mining industry.  Volzhsky Orgsintez produces butyl potassium xanthate in the amount of 28,000 tpa.

The main Russian producer for propylene oxide is Nizhnekamskneftekhim (70,000 tpa), then processing it into polyols at Elastokam (BASF and NKNK).  Thus, there is a shortage of raw materials for polyol production in Russia.  To replace imports of polyethers, it is necessary to build a production of propylene oxide with a capacity of 85-95,000 tpa. 

Khimprom-Novocheboksarsk

Khimprom at Novocheboksarsk opened its new calcium hypochlorite plant in March, which will help to increase the company’s revenues.  The company increased exports for a number of marketable products by 21% in 2017 over 2016.  At the end of 2017, the company increased the export of rubber chemicals, which are used in tyre production by 21%.  Deliveries of acetoninal to foreign markets increased by more than 20%, accounting for 60% of the total sales.  Export of diphenylguanidine by Khimprom rose by 16% in 2017, approaching the 2,000-ton mark.  Exports accounted for 86% of total sales of this product. 

Belarus

Belarussian petrochemical production

Naftan produced 13,600 tons of benzene in January which is 39% more than in December 2017.  The increase in output was due to an increase in capacity utilisation for the production of aromatics at the Novopolotsk plant. In addition, Grodno Azot increased production of caprolactam to 12,100 tons, which is 20% more than in December.  The output of ethylene in Belarus decreased by 4% in January to 6,500 tons, and the volume of propylene stayed the same at 4,200 tons. 

Methanol production at Grodno rose 6% in January which is 6% more than in December.  Domestic demand is driven largely by producers of urea-formaldehyde concentrate and urea resins.

Belarussian organic chemical trade, Jan-Dec 2017

Phthalic anhydride exports rose to 24,923 tons in 2017 against 21,549 tons in 2016.  Average prices per ton rose to $914 in 2017 against $731 in 2016.  Russia was the largest destination for phthalic anhydride exports from Lida in Belarus, taking 10,818 tons in 2017 against 8,451 tons in 2016.   Ukraine imported 3,382 tons from Belarus in 2017 against 3,812 tons in 2016.  After Russia and Ukraine, India was the next most important market for Belarussian phthalic anhydride.

Methanol exports from Belarus totalled 21,772 tons in 2017 against 31,641 tons in 2016.  Exports to Poland fell from 13,723 tons in 2016 to 4,577 tons in 2017, whilst volumes to Ukraine fell from 15,824 tons to 3,977 tons.  The average price of methanol exports from Belarus in 2017 amounted to $300 per ton against $262 per ton in 2016. 

Belarussian chemical trade, Jan-Dec 2017

Acrylonitrile exports from Belarus totalled 48,773 tons in 2017 against 37,329 tons in 2016, the average price rising from $875 to $1399 per ton.  The two largest destinations for Belarussian acrylonitrile in 2017 were Turkey, taking 19,594 tons against 22,613 tons in 2016, and the Netherlands which took 16,768 tons versus 3,972 tons.  Caprolactam exports from Belarus rose slightly from 6,451 tons in 2016 to 7,401 tons in 2017.  Exports have been reduced in the past couple of years due to increased domestic consumption.

Regarding chemical imports, Belarus purchased 13,884 tons of benzene in 2017 against only 1 ton in 2016.  Paraxylene shipments from Russia increased from 23,937 tons 2016 to 36,337 tons in 2017 whilst orthoxylene imports rose from 4,343 tons to 11,009 tons.

Propylene imports into Belarus rose to 53,292 tons in 2017 from 24,973 tons in 2016.  Most of the propylene, 51,794 tons, was imported from Russia in 2017 with the remainder being sourced from Azerbaijan.  Methanol imports into Belarus totalled 53,923 tons in 2017 against 17,659 tons in 2016.  Import per ton costs rose from $213 to $284.  Nearly all the methanol was imported from Russia.

PTA imports rose 70,869 tons in 2017 from 55,658 tons in 2016.  Poland was a major supplier of PTA accounting 18,489 tons in 2017, but superseded by South Korea which shipped 33,589 tons.  For MEG, Belarus imported 75,121 tons in 2017 against 53,026 tons in 2016.  Russia accounted for almost all imports in both years.

Belarussian polymer imports, Jan-Dec 2017

Polypropylene imports to Belarus decreased by 0.4% in 2017 to 95,5000 tons.  Demand reduction was mainly due to propylene copolymers, imports of which totalled 31,100 tons.  Homopolymer imports totalled 64,400 tons in 2017. 

PVC imports into Belarus increased by 39% in 2017 to 34,600 tons against 24,800 tons.  Russia supplied 83% of imports.   Polyethylene imports into Belarus totalled 123,600 tons in 2017, 4.8% down on 2016.  LDPE imports rose to 36,800 tons against 23,200 tons, whilst LLDPE imports dropped from 52,700 tons to 34,800 tons.  HDPE exports rose from 45,000 tons to 52,000 tons. 

Ukraine

Ukrainian PVC imports, Jan 2018

PVC imports into Ukraine dropped 16% in January to 5,700 tons against 6,700 tons.  The US supplied 2,700 tons against 1,900 tons in January 2017, whilst European suppliers provided 2,600 tons versus 4,000 tons.  Russia supplied 383 tons in January.

Ukrainian chemical imports, Jan 2018

Imports of phthalic anhydride to Ukraine amounted to 220 tons in January, against 142 tons in January 2017.  Lakokraska at Lida supplied 134 tons (61% of the total Ukrainian imports), 44 tons (20%) came from the Austrian company Atmosa FA, 22 tons from Deza and 20 tons from Kamteks-Khimprom.  Buyers included plasticizer producers Polikem (150 tons, or 68% of total imports) and TD LK-Ukraine (50 tons, or 23%). DOP imports into Ukraine amounted to 265 tons in January versus 457 tons in December and 283 tons in January 2017.  Supplies in January 2018 comprised Deza (52% of Ukrainian imports), Boryszew (40%), and the Korean Aekyung (8%).

Ukrainian benzene exports, Jan-Feb 2018

Ukrainian producers exported 5,900 tons of benzene which is 36% less than in January.  Karpatneftekhim increased shipments to Latvia by 22% in February to 5,200 tons.  In addition, last month, 691 tons of aromatic raw materials were shipped from Zaporizhkoks to Kuibyshevazot. 

In the first two months in 2018, Ukrainian companies exported 15,200 tons of benzene, which is 2.5 times more than in the same period of 2017.  The increase in the volume of export supplies from Ukraine was due to the resumption of benzol production at Karpatneftekhim.

Karpatneftekhim-LPGs

Karpatneftekhim increased imports of liquefied petroleum gas (LPG) in early 2018. Deliveries were made from Russia and Lithuania, totalling 13,000 tons of the butane fraction of Russian production.  For the full year of 2017, 3,700 tons of butane and isobutane were imported.

In January, Karpatneftekhim purchased 4,000 tons of Russian butane and in February 9,000 tons.  Deliveries were conducted through Belarus.  About 300 tons of LPG was supplied from the Mazeikiai Refinery.  Last year the Ukrainian government approved quotas for the free import and purchase of raw materials for the production of ethylene at the Karpatneftekhim.  The company will be able to purchase up to 1,170,000 litres of light distillates, up to 985,000 thousand litres of heavy distillates and up to 1,070,000 thousand litres of various liquefied petroleum gases per annum on preferential terms.

Central Asia

Azerbaijan chemical production, Jan-Feb 2018

Azerkhimiya increased the production of propylene in January by 3% to 5,600 tons, which is 3% more than in December 2017.  Of this volume, 1,100 tons were processed into isopropanol (in December 1,400 tons).  In addition, the plant produced 3,300 tons of C4s, 8% less than in December.  In February, 5,400 tons of propylene were produced by Azerkhimiya which is 5% less than in January.  Of this volume, 1,200 tons were processed into isopropanol.  In addition, in February, the plant produced 3,300 tons of C4s.

SOCAR Methanol-production of reagents

SOCAR Methanol has started production of methanol reagents.  Previously, SOCAR in the gas chemical industry of Azerbaijan produced intermediate products, now the production of final products began for the first time. Methanol reagent is used as a chemical reagent in laboratories.

According to SOCAR Methanol, a number of local companies have concluded contracts for the sale of these products and the first batch of methanol-reagent has already been sold.  In addition to the local market, SOCAR is able to provide methanol with laboratory reagents in Turkey, CIS countries and West Europe.  In accordance with international standards, methanol with a purity of more than 99.90% can be used in analytical chemistry. At the same time, SOCAR Methanol produces methanol with a purity of 99.98%.

Other SOCAR developments

Kaustik-Pavlodar expansion of caustic soda capacity

Kazakh producer Kaustik at Pavlodar will begin construction of the second stage of caustic soda production in 2018.   The production capacity will be 40,000 tpa and will allow Kaustik to supply the full need of the market for caustic soda.  Investments are estimated at $30 million.

In addition, in the FEZ in 2018, it is planned to launch an agrochemical plant for the production of plant protection products, glyphosate. The total capacity of production will be 11,000 tpa, requiring investments of $20 million. The opening of the Kaustik caustic soda plant at Pavlodar took place in October 2011, investments in its construction amounted to more than $108 million. The design capacity is 30,000 tpa of caustic soda, 6,600 tpa of sodium hypochlorite, 26,400 tpa and 45,000 tpa of hydrochloric acid. 

SOCAR Polymer produced a test batch of polypropylene at the plant in Sumgait at the end of February.  After reaching full capacity, the plant will be able to produce 180,000 tpa of polypropylene and 120,000 tpa of low-pressure polyethylene. The launch of polyethylene production is scheduled for the fourth quarter.

In 2018, the plant plans to produce about 70,000 tons of polypropylene. From October to mid-November, production will be stopped. The interruption in the work will be conditioned by the planned shutdown of the plant Azerkhimiya, which provides the enterprise with raw materials.  In 2019 the company expects to run at full capacity for propylene polymers.

SOCAR intends to launch a urea plant SOCAR Karbamid at Sumgait in August 2018.  Most of the products will be exported.  The company is completing construction and finishing works, and start-up and adjustment of equipment will begin in April.  Production at the plant will begin in August with the production of ammonia and in October the urea lines are expected to open.   The company will be able to produce 1,200 tons of ammonia and 2,000 tons of urea.  SOCAR expects to export about 450-500,000 tpa of urea and another 150,000 tons of to be sold domestically. 

In another development, BP and SOCAR TURKEY ENERJI A.S (SOCAR Turkey) have entered into a licensing agreement for BP’s latest generation PTA technology.  SOCAR Turkey intends to deploy the technology in its new 900,000 tpa unit at Aliaga, Turkey, expected to come on stream by 2023 once the final investment decision is taken.



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