CIREC news from issue 365

Central European refinery and petrochemical margins

Refinery and petrochemical margins rose sharply in March for Central European oil processors, with Lotos of the refiners achieving the highest margin at $3.39 per barrel rising from $2.8 in February.  Orlen’s refinery margin rose to $3 per barrel in March from $1.8 per barrel.  The model refinery margin plus the Brent/Ural differential was $2/barrel for Orlen in the first quarter, compared to $1.1/b in the fourth quarter. 

PKN Orlen's model downstream margin rose to $8.5 per barrel in March 2021 from $6.7 in February.   This meant that in the first quarter of 2021, PKN Orlen's downstream margin increased to $7.1 per barrel from $5.4 in the fourth quarter in 2020.  MOL increased refining margins overall from $2.1 to $3.5, including a rise to $3.9 per barrel by Slovnaft. 

Central European Petrochemical Margins (€/ton)

 

Q1 19

Q1 20

Q1 21

PKN Orlen

885

845

1044

MOL

415.2

383.7

668.5

PKN Orlen’s model petrochemical margin rose to €1,232 per ton in March from €1,011 a ton in February.  Overall, this meant that the petrochemical margin reached €1,044 per ton in the first quarter of 2021 and €845 per ton in the first quarter in 2020 and €885 in the first quarter in 2019.  MOL’s petrochemical margin jumped from €624.9 per ton to €873.7 in March, raising the quarterly average to €668.5 against €383.7 in the same period last year.

Sale of Lotos assets & crude supply to Orlen

Orlen is currently in talks with potential buyers for a 30% stake in the Lotos refinery which is one of the conditions that the European Commission has set out for the merger of the two Polish oil companies.  Saudi Aramco is considered to have the strongest negotiating position, whilst MOL and BP have also been cited as potential buyers.   Currently, Orlen Group refineries receive crude from Saudi Arabia, Russia as well as from the North Sea, Angola and Nigeria.  This year, around one million tons of oil has been agreed with ExxonMobil from the US to be delivered to Orlen.  As recently as around 2015, oil supplies from Russia accounted for about 90% of the supply of Polish refineries.  In 2020, this share fell to around 70%.  

Mixing American oil with Russian oil will facilitate the production of more gasoline at the expense of even heavy fuel oil for which the demand is low.    The second most popular raw material variety in Poland is from the Middle East, which in 2020 amounted to almost 4 million tons most of which came from Saudi Arabia.  The share of Polish oil in the processing of Orlen’s refineries is about 4%.  Aside Lotos the European Commission is concerned about PKN Orlen taking direct control of PGNiG.

 

PKN Orlen-petrochemical production Jan-Feb 2021

 

PKN Orlen Production (unit-kilo tons)

 Product

Jan-Feb 21

Jan-Feb 20

 Ethylene

68.6

80.7

 Propylene

60.5

74.4

 Butadiene

9.4

11.3

 Toluene

1.8

1.8

 Phenol

8.0

8.5

 Polyethylene

47.5

51.5

 PVC

43.3

49.1

 Polypropylene

51.7

60.9

PKN Orlen produced 68,600 tons of ethylene at Plock in the first two months in 2021 against 80,700 tons in the same period in 2020, whilst propylene dropped from 74,400 tons to 60,800 tons.  Olefin production was down due to necessary maintenance at Plock. 

In other areas of production PKN Orlen produced 9,400 tons of butadiene in Poland, against 11,300 tons in January to February 2020, whilst phenol production dropped slightly from 8,500 tons to 8,000 tons.  Orlen’s BOP jv at Plock produced 47,500 tons of polyethylene in January to February 2021 against 51,500 tons in the same period in 2020 whilst polypropylene production dropped from 60,900 tons to 51,700 tons.  Polyolefin production was affected by lower olefin availability.  

Polish monomer & petrochemical trade, Jan-Feb 2021

Polish Chemical Imports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Butadiene

16.7

17.5

Ethylbenzene

23.4

19.5

Paraxylene

6.8

8.3

Propylene

42.6

18.1

Propylene Glycol

5.9

3.7

Propylene Oxide

1.6

0.6

Styrene

9.0

16.1

VAM

3.8

3.0

Propylene imports into Poland amounted to 42,600 tons in the first two months in 2021 against 18,100 tons in the same period in 2020.  Lower propylene production from the cracker by PKN Orlen impacted on polypropylene production and exports by Basell Orlen Polyolefins.   The overall market balance for propylene consumption in the first two months in 2021 was similar to 2020 due to an increase in propylene exports from Poland from 1,100 tons to 10,000 tons. 

Polish Propylene Imports 2021 (unit-kilo tons)

Country

Jan

Feb

Lithuania

2.3

1.1

Germany

7.9

14.0

Russia

2.4

3.1

Ukraine

5.6

6.1

Others

0.0

1.0

Total

18.3

25.3

Germany supplied 21,900 tons of propylene to the Polish market in January to February 2021 followed by Ukraine with 11,700 tons.  Import activity is expected to continue into Poland until Polimery Police starts production. 

For other monomers and derivatives Poland imported 16,700 tons of butadiene in the first two months in 2021 against 100,500 tons in the same period in 2019.  Ethylbenzene exports rose from 19,500 tons to 23,400 tons, whilst paraxylene imports dropped from 8,300 tons to 6,800 tons. 

Polish Chemical Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Benzene

43.9

35.5

Caprolactam

10.4

8.5

Ethylene Glycol

1.1

2.2

Propylene

10.1

1.1

PTA

107.3

71.5

Styrene

3.8

0.1

Toluene

2.7

1.9

For export activity Poland increased benzene shipments from 35,500 tons in January to February 2020 to 43,900 tons in the same period in 2021.  Germany was the major destination for Polish benzene exports followed by the Czech Republic.  The largest petrochemical exported from Poland is PTA where shipments rose from 71,500 tons to 107,300 tons in the same period in 2021.  At the same time imports increased from 3,000 tons to 8,300 tons. 

Orlen-PTA exports & Polish consumption

Polish Exports of PTA (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belarus

2.9

7.4

Germany

94.6

56.5

Lithuania

7.1

2.0

Switzerland

1.5

1.3

Turkey

0.0

1.9

Others

1.2

2.4

Total

107.3

71.5

PTA exports from Poland amounted to 107,300 tons in the first two months in 2021 against 71,500 tons in the same period in 2020.  Shipments to Germany rose to 94,600 tons from 56,500 tons in January to February 2020.  In January this year Germany took 34,049 tons of PTA for €17.280 million followed by 60,520 tons in February for €14.235 million reflecting the low prices achieved in that month. 

Other destinations for Polish PTA include Lithuania and Belarus.  Imports of PTA into Poland rose to 8,300 tons in the first two months in 2021 against 3,000 tons in 2020.  Regarding production of PTA PKN Orlen is striving to improve the environmental record of the plant by examining the biogas produced in the treatment plant.

Czech petrochemical trade, Jan-Feb 2021

Czech Petrochemical Imports

(unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Ethylene

0.5

1.5

Propylene

8.6

6.9

Butadiene

15.6

6.0

Benzene

14.4

14.0

Toluene

1.2

0.3

Styrene

9.5

7.2

Butadiene imports totalled 15,601 tons in the first two months in 2021 versus 6,046 tons in the same period in 2020.  This continues the upward trend from 2020.  In January and February 2021 Germany supplied 12,500 tons of butadiene to the Czech market for €8.289 million followed by Hungary with 3,102 tons for €2.056 million. 

For other monomers, propylene imports in the first two months increased from 6,854 tons to 8,645 tons whilst styrene imports rose from 7,228 tons to 9,457 tons.   Regarding export activity the Czech Republic increased benzene shipments in the first two months to 8,611 tons from 1,265 tons whilst ethylbenzene exports rose from 19,487 tons to 21,844 tons.  Most of the ethylbenzene is exported to Poland.

 

HIP Petrohemija privatization

 

Serbian Chemical Exports (unit-kilo tons)

Product

Jan-21

Jan-20

Polyethylene

11.8

9.2

Polypropylene

2.0

1.7

Styrene Butadiene Rubber

1.5

1.7

Methanol

10.7

10.2

Acetic Acid

7.5

7.6

Russia and Serbia continue to discuss the possibility of privatising HIP Petrohemija.  Serbia owns a controlling stake in the HIP Petrohemija whilst the share of Serbian energy company NIS (NIS), controlled by Gazprom Neft, is 20.86%.

HIP Petrohemija possesses capacities of 200,000 tpa, 85,000 tpa of propylene, 90,000 tpa of HDPE and 65,000 tons of LDPE. The plant also produces propylene, 1.3-butadiene, MTBE and polyethylene pipes. 

HIP Petrohemija plant maintenance 2021

HIP Petrohemija halted production at its synthetic rubber plant at Elemir, as part of a 30-day overhaul.  The renovation of the technological equipment of the plant, located near Zrenyanin, began on 20 March 2021.  The Elemir plant, operating since 1983, produces 45,000 tpa of butadiene rubber and 40,000 tpa of styrene-butadiene rubber (SBR).  HIP Petrohemija acquired the plant in 1991.

 

Central European methanol trade, Jan-Feb 2021

 

Polish Methanol Imports (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belarus

1.3

1.6

Finland

16.8

0.0

Lithuania

1.0

2.1

Germany

12.1

1.2

Netherlands

25.6

0.0

Norway

0.0

6.4

Russia

58.7

96.3

Others

0.6

25.3

Total

116.0

132.9

Methanol exports from MSK in Serbia amounted to 10,700 tons in the first two months versus 10,200 tons in the same period in 2021, followed by a slight decline in acetic acid exports from 7,600 tons to 7,500 tons.  MSK runs its own fleet of rail wagons and uses the port of Bar in Montenegro. 

Czech Methanol Imports (unit-kilo tons)

Country

Jan-Feb 21

Jan Feb 20

Germany

2.5

2.4

Norway

0.0

0.3

Russia

7.1

6.0

Poland

3.8

7.7

Others

0.4

0.0

Total

13.7

16.4

Polish methanol imports dropped to 116,000 tons in the first two months in 2021 from 132,900 tons in the same period in 2020 whilst exports fell from 38,300 tons to 27,400 tons.  As a non-producer Poland re-exports methanol to Austria, the Czech Republic and Germany.  Russia is the major supplier to the Polish market although reduced shipments from 96,300 tons in January to February 2020 to 58,700 tons in the same period this year.

Methanol imports into the Czech Republic amounted to 13,700 tons in the first two months in 2021 against 16,400 tons in same period in 2020.  Russian shipments rose from 6,000 tons to 7,100 tons, whilst volumes from Poland dropped from 7,700 tons to 3,800 tons.

 

Central European isocyanate imports

 

Polish TDI Imports (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Germany

4.1

4.8

Netherlands

1.6

1.9

Hungary

6.6

6.2

Belgium

0.1

0.0

Saudi Arabia

0.3

0.7

Others

0.6

0.1

Total

13.3

13.7

TDI imports into Poland amounted to 13,300 tons in the first two months in 2021 against 13,700 tons in the same period in 2020.  Germany and Hungary were the two largest suppliers providing 4,100 tons and 6,600 tons in January-February 2021 respectively.  Costs in the first two months in 2021 totalled €34.9 million which translated into an average price per ton of €2629 against €1532 in the same period in 2020. 

MDI imports into Poland amounted to 21,950 tons in the first two months in 2021 for a total cost of €42.907 million.  Average prices per ton in 2020 were €1358, rising to €1951 per ton in the first two months in 2020. Major suppliers to the Polish market this year include Germany, Hungary and Belgium. 

Polish TDI Costs €/ton

Year

Jan

Feb

2021

2.7

2.6

2020

1.5

1.6

MDI imports into the Czech Republic totalled 7,143 tons in January to February 2021 up from 4,071 tons in the same period in 2020.   Import costs rose in the first two months this year with prices averaging €1962 per ton against €1455 in January to February 2020.  TDI imports into the Czech Republic dropped from 1,074 tons in January to February 2020 to 1,061 tons in the same period in 2021. 

Grupa Azoty, caprolactam-polyamide

Grupa Azoty produced 27,300 tons of caprolactam from its two plants at Tarnow and Pulawy in the first two months in 2021 against 27,800 tons in the same period in 2020.  Exports of caprolactam rose to 10,500 tons from 8,100 tons.  The new polyamide unit brought on stream at Tarnow has enabled the group to fully balance caprolactam supply with demand for polyamide production and to focus on polyamides and derivatives further down the value chain.  The new plant at Tarnow produces polyamides in a full viscosity range, suitable for a broader spectrum of applications.  The group is seeking out opportunities to expand into advanced polyamide-based polymers, polymer additives, and engineering plastics.

Grupa Azoty-propylene & raw materials

Grupa Azoty Capacities (ktpa)

Product

Capacity (ktpa)

Ammonium sulphate

700

Urea ammonium nitrate

1200

Urea

1600

PA6

92

Caprolactam

170

Melamine

96

Plasticizers

83.5

Oxo alcohol

205

Titanium white

40

Grupa Azoty’s strategy for the oxo business focuses on securing access to its own sources of raw materials, extending the value chain to include more specialty products, and improving operational efficiency.  In order to satisfy its own propylene demand and create opportunities for growth in a new value chain, the Group is carrying out a project to build propylene (PDH) and polypropylene production units at Police. 

To better align its offering with current market expectations and regulatory requirements, non-phthalate, organic and specialty plasticizers are being added to the product portfolio. In addition, Grupa Azoty sees growth opportunities in extending its product chain and processing of aldehydes into specialty products.

Chimcomplex-polyol expansion

Chimcomplex Production (unit-kilo tons)

Product

Jan-Dec 20

Jan-Dec 19

Polyols

72

62

Chlor-alkali

116

100

Oxo alcohols

19

12

Others

25

26

 

 

 

Chimcomplex aims to complete the construction of its new polyol plant at Ramnicu Valcea in 2021 after an investment of €40 million at the Oltchim site.  This will increase polyol production capacity to over 140,000 tpa and will take Chimcomplex into the top eight players in Europe by capacity.  

The new polyol plant is designed with high-performance features in terms of digitalization, energy efficiency, and disposal of manufacturing waste.  Its annual production capacity will be the equivalent of 3,500 km of new 2x2m flexible mattresses.  The new plant will produce polyols using CO2 which results in significant environmental benefits.  

Chimcomplex announced a net profit of 95 million lei for 2020, with EBITDA of 257 million lei, representing 22% of turnover.  The results from 2020 allowed the company to reduce the loans contracted for the Oltchim transaction to only €110 million, a debt multiplier of just over 1.85 compared to the annualized EBITDA.  In December 2018, the company contracted on the London financial market a loan of €164 million to finance the Oltchim purchase.

 

Grupa Azoty, caprolactam-polyamide

 

Grupa Azoty produced 27,300 tons of caprolactam from its two plants at Tarnow and Pulawy in the first two months in 2021 against 27,800 tons in the same period in 2020.  Group exports of caprolactam rose to 10,500 tons from 8,100 tons in January to February last year.  The new polyamide unit brought on stream at Tarnow has enabled the group to fully balance caprolactam supply with demand for polyamide production and to focus on polyamides and derivatives further down the value chain.  The new plant at Tarnow produces polyamides in a full viscosity range, suitable for a broader spectrum of applications.  The group is seeking out opportunities to expand into advanced polyamide-based polymers, polymer additives, and engineering plastics.

Polish Chemical Production (unit-kilo tons)

 Product

Jan-Feb 21

Jan-Feb 20

 Caustic Soda Liquid

31.2

63.4

 Caustic Soda Solid

6.9

13.0

 Caprolactam

27.3

27.8

 Acetic Acid

0.8

0.8

 Polystyrene

12.6

10.9

 EPS

13.2

16.5

 Synthetic Rubber

39.5

50.3

 Ammonia (Gaseous)

465.0

242.2

 Ammonia (Liquid)

17.5

17.9

 Pesticides

14.0

8.8

 Nitric Acid

441.0

422.0

Nitrogen Fertilisers

368.0

370.0

Phosphate Fertilisers

76.4

60.9

Potassium Fertilisers

60.7

60.5

Grupa Azoty-propylene chain & raw materials

Grupa Azoty’s strategy for the oxo business focuses on securing access to its own sources of raw materials, extending the value chain to include more specialty products, and improving operational efficiency.  In order to satisfy its own propylene demand and create opportunities for growth in a new value chain, the group is carrying out a project to build propylene (PDH) and polypropylene production units at Police in northern Poland. 

In order to align with regulatory requirements, non-phthalate, organic and specialty plasticizers are being added to Grupa Azoty’s product portfolio. In addition, Grupa Azoty sees growth opportunities in extending its product chain and processing of aldehydes into specialty products. 

Consumption of strategic raw materials by the Grupa Azoty Group 2020 (tons apart from natural gas & heat)

Natural gas [m3]

736,679,496

Hard coal

1,312,267

Nitric Acid

1,215,664

Phosphate rock

884,321

Heat [MWh]

493,473

Sulphuric acid

424,727

Potassium chloride

387,919

Ammonia

363,845

Propylene

122,868

Phenol

84,179

Benzene

53,554

Dolomite

52,368

Methanol

9,969

In 2021 raw material purchases and prices were heavily influenced by the pandemic and the fluctuations in hydrocarbon prices.  Propylene purchases totalled 122,868 tons in 2020, with phenol amounting to 84,179 tons and benzene 53,554 tons. 

Grupa Azoty Capacities (ktpa)

Product

Capacity (ktpa)

Ammonium sulphate

700

Urea ammonium nitrate

1200

Urea

1600

PA6

92

Caprolactam

170

Melamine

96

Plasticizers

83.5

Oxo alcohol

205

Titanium white

40

Grupa Azoty uses natural gas mainly to produce ammonia and hydrogen.  To produce fertilisers, the group also uses dolomite, technical-grade nitric acid and technical-grade sulphuric acid, which is also an input in caprolactam production.  Liquid ammonia purchased by Grupa Azoty is used in the manufacture of nitrate fertilisers and caprolactam.

Other necessary inputs in the production of caprolactam include benzene, phenol and liquid sulphur.  The group uses technical-grade methanol for the manufacture of Tarnoform and formalin.

Grupa Azoty Pulawy-raw materials used

High-methane natural gas is used by Grupa Azoty Pulawy for the production of ammonia and also for heating purposes in the production of caprolactam and melamine and as an auxiliary fuel at the CHP plant.  Coal is the primary source of energy at the Pulawy plant.  Benzene is used to produce cyclohexanone, whilst sulphur is used to make sulphuric acid, which in turn is used in the production of caprolactam.  Ammonia produced internally is periodically supplemented with purchased ammonia.

Grupa Azoty Police- raw materials used

Polish Imports of Polypropylene (unit-kilo tons)

 

2020

2019

2018

Homopolymers

570

497

461

Copolymers

320

298

295

Total

890

795

756

Polish Imports of Polypropylene (unit-kilo tons)

 

2020

2019

2018

Homopolymers

180

169

461

Copolymers

79

74

295

Total

259

243

756

Polish Market Balance for Polypropylene (unit-kilo tons)

 

2020

2019

2018

Production

345.0

342.7

273.6

Exports

258.9

243.4

273.6

Imports

890.1

794.7

191.9

Market Balance

976.1

894.0

756.2

Grupa Azoty Police uses potassium chloride, phosphates, sulphur and sulphuric acid procured from suppliers to produce compound fertilisers. Sulphuric acid, ilmenite, titanium slag and natural gas are key raw materials in the production of titanium white. Natural gas is used in the production of ammonia intended for sale and ammonia used as a semi-finished product to make urea and compound fertilisers.

Polimery Police-propane splitter installaltion

Preparatory work is underway to install the largest structural element of the future splitter for the polypropylene plant at Polimery Police.  Weighing nearly 900 tons, the project apparatus will be embedded with a ring crane.  The process of installing the propane-propylene splitter is planned for early May 2021.

The scope of the investment includes propane dehydrated plant (PDH), polypropylene production plant, logistics facilities and infrastructure, transhipment and storage terminal (offshore gas).  The start of commercial operation is scheduled for the first quarter in 2023.

Polimery Police intends to market polypropylene from the new plant predominantly in Central Europe, up to a 1000km radius.  Poland may represent the largest market for Polimery Police considering that the market deficit is expected to exceed 1.0 million tons in 2021.  This forecast is based on significant increases recorded in the past three years, including a rise in 2020 of 82,000 tons. 

Russian chemical production, Jan-Feb 21

Russian chemical production rose overall 5.3% in February 2021 against February 2020, with the base chemicals segment showing an increase of 7.5%.  The largest increase in production in January-February was accounted for by mineral fertilisers, whilst ZapSibNeftekhim acted as a main driver in the petrochemical sector.  In January-February 2021, Russian enterprises produced just over 4.416 million tons of fertilisers which is 15.4% more than in 2020.

Russian Chemical Production

(unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Caustic Soda

211.4

220.0

Soda Ash

583.0

591.0

Ethylene

739.2

700.7

Propylene

522.5

467.3

Benzene

241.0

259.0

Xylenes

93.0

81.5

Styrene

134.7

110.3

Phenol

44.0

44.0

Ammonia

3,400.0

3,300.0

Nitrogen Fertilisers

1,943.0

1,880.0

Phosphate Fertilisers

708.0

696.0

Potash Fertilisers

1,765.0

1,646.0

Plastics in Bulk

1,770.0

1,637.0

Polyethylene

589.0

521.0

Polystyrene

95.7

90.0

PVC

181.3

186.0

Polypropylene

350.3

350.3

Polyamide

33.0

30.4

Synthetic Rubber

296.0

266.0

Synthetic Fibres

32.1

22.8

The production of benzene in February this year decreased to 113,000 tons against 120,000 tons a month earlier. Russian benzene production dropped 7.5% in the first two months to 241,000 tons.

In the first two months of 2021, the production of caustic soda amounted to 211,400 tons, which is 4.6% less than the same period in 2020.  Soda ash production dropped from 591,000 tons to 583,000 tons.

The total production of Russian polymers in primary form amounted to 1.77 million tons in January to February 2021, which is 8.4% more than last year.  Most of the increase was achieved through polyethylene production.   ZapSibNeftekhim is intensifying olefin and polyolefin production at Tobolsk based on LPG feedstocks.  

Baltic Chemical Complex receives permission for project go-ahead

The Baltic Chemical Complex has received permission to proceed with plans to build the gas-chemical complex at Ust-Luga, which will follow the construction of the gas processing plant.   Gazprom and Rusgazdobycha have started work in the gas processing and liquefaction complex at Ust-Luga, which will form the basis for producing ethane fractions, liquefied hydrocarbon gases and pentane-hexane fractions.  From the ethane gas processing complex, it will be possible to produce around 3 million tpa of polyethylene.  

Russian ethylene projects at various stages of construction

Company

Location

Capacity

Amur Gas Chemical Complex

Svobodny

2.7 million tpa

Baltic Chemical Complex

Ust Luga

3 million tpa

Irkutsk Polymer Plant

Ust Kut

650,000 tpa

Nizhnekamskneftekhim

Nizhnekamsk

600,000 tpa

The design concept of the Baltic Chemical Complex consists of six units of polyethylene production each with a capacity of 480,000 tpa.  As part of the gas-chemical complex it will be necessary to establish the construction of infrastructure facilities including access roads and temporary residential towns.  The preparation of the site for the start of construction and installation work is reported to have been completed.  The project is carried out with the support of the state development corporation VEB.RF.   

Siemens Energy has agreed to supply equipment for the Baltic Chemical Complex.  According to the contract, six single-stage turbochargers and six turbo-clad units will be produced and delivered. Production will be carried out at the Siemens Energy plant at Leipzig.  In March Gazprom and Rusgazdobycha selected Linde to replace NIPIGAZ for the design of the gas processing plant at Ust-Luga.  RusKhimAlliance, a jv between Gazprom and Rusgazdobycha, signed an agreement of intent with Linde Engineering for the design, construction and equipment supply with a capacity of 45 billion cubic metres per annum.  

RusKhimAlliance -EPC contract for gas processing plant

RusKhimAlliance is preparing an EPC contract with Linde for the construction of the gas processing plant at Ust-Luga.  Following the acquisition of Salavatgazoneftekhimproekt Ruskhimalliance aims to create an engineering centre on its base.  For the LNG plant, the technology is being evaluated between either Air Products and Technip or Linde.

Investments in the gas processing project are estimated at 750 billion roubles, with the first stage intended to start in 2024, and the second in 2025.  To help the design process RusKhimAlliance agreed in March to purchase 80.1% of OOO Design Institute Salavatgazoneftekhimproekt from Gazprom neftekhim Salavat, which specializes in integrated and three-dimensional design of industrial facilities.  The Salavat institute is to provide technical support for the procurement of equipment and construction and installation works.

Sberbank-Amur Gas Chemical Complex

Sberbank states that it will take part in financing the Amur gas-chemical complex worth up to $1.5 billion.  Total Investments in the gas chemical complex are estimated in the range of $10-11 billion.  The construction of the complex will be synchronized with the gradual climb towards full capacity utilisation of the Amur Gas Processing Plant.   Estimated completion of construction of the gas-chemical complex and commissioning works are set provisionally for 2024-2025.  Sinopec has already taken a 49% stake in the jv which is to become a key project in SIBUR’s investment programme for the next five years. 

Irkutsk Oil Company and polymer project

Kazanorgsintez-Tecnimont biodegradable polymers

Kazanorgsintez and Maire Tecnimont have revived the possibility of building a new plant for the production of biodegradable polymers in Tatarstan.   The relevant memorandum of understanding was signed in April with the subsidiaries of Maire Tecnimont S.p.A. The project intends to use NextChem's know-how and MET Development capabilities. 

In accordance with the agreement, Kazanorgsintez and Maire Tecnimont Group will jointly assess and analyse the possibility of building a biopolymer plant in Tatarstan.  Maire Tecnimont Group will provide technology solutions and best know-how for the development of the project.  NextChem is also ready to provide its know-how and provide assistance in the advanced basic design (FEED), logistics and construction (EPC) production facilities.

The French company SUEZ has signed a contract with Irkutsk Oil Company (INK) to supply wastewater treatment equipment for the Irkutsk Polymer Plant.  The application of the technology will allow the plant to achieve almost zero discharge of liquid waste and introduce maximum reuse of water. The wastewater treatment process will enable the Irkutsk Polymer Plant to meet national standards.

The construction of the polymer plant, as part of the phased transition from gas to added value includes a polyethylene capacity of 650,000 tpa based on its own raw materials. Companies Toyo Engineering (Japan), Axens (France), Gemont (Turkey) are involved in the project which is scheduled to be commissioned in 2024.  The pandemic is not expected to delay the start-up date. 

Aside polymers the Irkutsk Oil Company together with the Japanese oil and gas state corporation JOGMEC is studying the possibility of supplying the Japanese market with environmentally friendly hydrogen fuel. 

Methanol project Yamal Nenets

The development of the methanol plant at Indiga in the Yamal Nenets region is interlinked and interdependent of the creation of an ice-free port.  Such a port would be controlled by Ilya Traber, who controls the Vysotsk and Ust-Luga ports and other northern ports in Russia.   Potential investments in the Yamal-Nenets form the basis of the Arctic Zone Development Strategy, based on the Korovinskoye and Kumzhinskoe gas condensate fields.  Both fields were owned by Pechora LNG, under the Alltech Group, and came under the control of former State Duma deputy Vitaly Yuzhilin and businessmen Gennady Mirgorodsky and Dmitry Ozersky through RusKhim in 2020.  Ilya Traber who could be responsible for the ice-free port has a controversial reputation and is known as the "night governor" of the Leningrad region.   

The project concept of the new owners was originally based on the development of the Kumzhinskoe and Korovinskoye fields but has widened to include the processing of natural gas into methanol.  At the same time RusKhim has publicised its withdrawal from the proposed project to construct a 1.7 million tpa methanol plant near Ust Luga stating that the lack of guarantees on logistics and gas supply made the project unworkable.    

 

Russian ethylene production, Jan-Feb 2021

 

Russian Ethylene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

39.3

39.3

Kazanorgsintez

94.6

109.2

Stavrolen

57.0

57.5

Nizhnekamskneftekhim

105.8

108.0

Novokuibyshevsk Petrochemical

9.3

11.2

Gazprom N Salavat

61.5

64.1

SIBUR-Kstovo

65.9

74.5

SIBUR-Khimprom

9.4

9.5

Tomskneftekhim

48.3

45.9

Ufaorgsintez

14.9

22.2

ZapSibNeftekhim

233.2

159.7

Total

739.2

701.1

Russian ethylene production totalled 739,200 tons in the first two months in 2021 against 701,100 tons in 2020 in the same period in 2020.

ZapSibNeftekhim produced 233,200 tons of ethylene up from 159,700 in January to February 2020.  Other Siberian producers include Tomskneftekhim, which increased production from 45,900 tons to 48,300 tons and Angarsk Polymer Plant which was unchanged for the first two months at 39,000 tons. 

In Tatarstan Nizhnekamskneftekhim reduced ethylene production from 108,000 tons to 105,000 tons whilst Kazanorgsintez reduced production from 109,200 tons to 94,500 tons.  Both producers belong to the TAIF Group and both reported weak financial results for 2020. 

In Bashkortostan Ufaorgsintez reduced ethylene production to 14,900 tons from 22,200 tons in January to February 2020 after encountering a fire at the cracker in February.  Gazprom neftekhim Salavat reduced production slightly from 64,100 tons to 61,500 tons. 

Smaller Russian ethylene producers include Novokuibyshevsk Petrochemical, in the Samara region, and SIBUR-Khimprom in the north east Urals.  Production at Novokuibyshevsk fell in the first two months in 2021 to 9,300 tons from 11,200 tons whilst SIBUR-Khimprom at Perm produced 9,400 tons against 9,500 tons. 

 

In the Nizhniy Novgorod region SIBUR-Kstovo produced 65,900 tons of ethylene in the first two months in 2021 against 74,100 tons in the same period in 2020.  Almost all ethylene produced at SIBUR-Kstovo is processed at SIBUR's facilities in the Nizhny Novgorod region including ethylene oxide and ethylene glycols and the RusVinyl jv for VCM-PVC.  In the Stavropol region Stavrolen produced 57,000 tons of ethylene versus 57,500 tons in January to February 2020.   Stavrolen uses ethylene for the production of HDPE and VAM. 

 

Russian propylene production, sales & exports, Jan-Feb 2021

Russian Propylene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

21.5

21.5

Kazanorgsintez

7.8

8.4

Lukoil-NNOS

29.2

40.3

Stavrolen

22.7

21.3

Nizhnekamskneftekhim

53.2

53.9

Novokuibyshevsk Petrochemical

7.2

7.7

Omsk Kaucuk

2.1

8.1

Polyom

31.7

30.6

Gazprom n Salavat

27.2

27.9

SIBUR Kstovo

29.6

32.5

SIBUR-Khimprom

8.1

12.0

Tomskneftekhim

25.5

26.6

SIBUR Tobolsk

0.0

75.0

Ufaorgsintez

29.9

33.2

ZapSibNeftekhim

227.0

68.0

Total

522.5

467.3

Having been merged with SIBUR Tobolsk at the end of last year ZapSibNeftekhim produced 227,000 tons of propylene against the combined plants 143,000 tons in January to February 2020.  Elsewhere Ufaorgsintez reduced production from 33,200 tons to 29,900 tons following an outage in February whilst Nizhnekamskneftekhim reduced production slightly from 53,900 tons to 53,200 tons.

Sales of propylene on the domestic dropped in the first two months in 2021 to 58,000 tons versus 73,200 tons in the same period in 2020.  Supply has been tighter this year due to increased internal processing combined with plant downtime.  Lukoil-NNOS at Kstovo reduced production in the first two months to 29,200 tons from 40,300 tons in the period January to February 2020 due to plant maintenance, resulting in lower domestic merchant sales from 32,000 tons to 25,500 tons.  Saratovorgsintez, the largest merchant buyer of propylene on the Russian market, reduced inward shipments from 32,400 tons in January to February 2020 to 27,500 tons in the same period in 2021 due to lower availability from Lukoil-NNOS.  Another reason for the lower merchant market sales in the first two months this year is that propylene purchased last year by SIBUR Tobolsk from ZapSibNeftekhim is now defined as internal processing after the two divisions at Tobolsk were merged at the end of 2020.

Russian Propylene Domestic Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

7.4

13.3

SIBUR-Kstovo

24.5

26.9

LUKoil-NNOS

25.5

32.0

Tomskneftekhim

0.1

0.2

Nizhnekamskneftekhim

0.4

0.7

Total

58.0

73.2

The Angarsk Polymer Plant shipped the main volumes of commercial propylene to the Chinese market, as well as to Ufaorgsintez, where after the fire in February its own production of monomer was reduced.  In the first two months in 2021 the Angarsk Polymer Plant reduced domestic sales from 13,300 tons to 7,400 tons.  By March, merchant availability was tight enough for domestic producers to ship product only within the framework of contractual obligations.  

Russian Producer Propylene Exports (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Lukoil-NNOS

3.7

6.8

SIBUR-Kstovo

2.0

3.4

Angarsk Polymer Plant

6.6

0.0

Total

12.3

10.2

Propylene exports from Russian producers amounted to 12,300 tons in the first two months in 2021 against 10,200 tons in the same period in 2020.   Lukoil-NNOS reduced export sales from 6,800 tons to 3,700 tons whilst SIBUR-Kstovo reduced exports from 3,400 tons to 2,000 tons. 

The Angarsk Polymer Plant exported 6,600 tons of propylene in January to February 2021 against zero in the same period in 2020, all of which was sent to China.  Exports of propylene from Angarsk have contributed to a tight domestic market supply balance in Russia for propylene.  This had helped maintain some price equilibrium but has recently started to pressure the prices upward. 

 

Russian styrene production & sales, Jan-Feb 2021

 

Russian Styrene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Nizhnekamskneftekhim

53.1

52.7

Angarsk Polymer Plant

7.2

6.7

SIBUR-Khimprom

23.4

22.5

Gazprom n Salavat

34.7

20.3

Plastik, Uzlovaya

16.4

8.2

Total

134.7

110.3

Russia produced 134,700 tons of styrene in January to February 2021 versus 110,300 tons in the same period in 2020.  The largest producer Nizhnekamskneftekhim increased production from 52,700 tons to 53.100 tons.  Gazprom neftekhim Salavat increased production slightly from 20,300 tons to 34,700 tons.  SIBUR-Khimprom at Perm increased production from 22,500 tons in the first two months in 2020 whilst Plastik at Uzlovaya doubled volumes from 8,200 tons to 16,400 tons.   

Russian styrene producer exports amounted to 19,000 tons in January to February 2021 against 14,900 tons in the same period in 2020.  Revenues amounted to $7.8 million over those two months.  For the whole of 2020 revenues from Russian styrene exports totalled $87.3 million against $123 million in 2019 and $194 million in 2018.

Russian Styrene Exports (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

1.0

0.4

Gazprom n Salavat

17.8

11.6

Nizhnekamskneftekhim

0.0

0.0

SIBUR-Khimprom

0.2

2.8

Total

19.0

14.9

After increased production in the first two months Gazprom neftekhim Salavat was able to increase export shipments from 11,600 tons January to February 2020 to 17,800 tons.  Finland took 64.7% of Russian styrene exports followed by Turkey with 18.8% and Norway with 5.3%. 

Nizhnekamskneftekhim resumed export deliveries of styrene in March the entire volume of which was supplied to Finland. The resumption of monomer exports by the company was influenced most likely due to the high price of the product on the European market.

 

Russian HDPE production and trade, Jan-Feb 2021

 

Russian HDPE Production (unit-kilo tons)

 

Jan-Feb 21

Jan-Feb 20

Kazanorgsintez

66.3

97.0

Stavrolen

53.5

47.0

Gazprom neftekhim Salavat

17.1

22.0

ZapSibNeftekhim

192.9

112.1

Total

329.8

278.1

In the first two months of 2021, HDPE production totalled 329,800 tons, which is 13% more than in the same period in 2020. Production amounted to 152,500 tons in February against 172,400 tons in January.   ZapSibNeftekhim increased production by 57% over the first two months in 2020 to achieve 192,900 tons of HDPE.  Kazanorgsintez reduced production in January to February 2021 to 66,300 tons which was 29% lower than in the same period in 2020.   Stavrolen was unchanged at 53,500 tons for the first two months and Gazprom neftekhim Salavat reduced from 22,000 tons to 17,100 tons.

 

ZapSibNeftekhim produced 902,000 tons of HDPE/LLDPE in 2020 having started up at the beginning of the year.  After the launch of ZapSibNeftekhim SIBUR increased the capacity of polymers threefold, whilst at the same time reducing the amount of LPG exports.   About 3 million tpa of LPG can be processed at ZapSibNeftekhim. 

 

The start-up of ZapSibNeftekhim meant that Russian HDPE exports increased from 160,000 tons in 2019 to 664,000 tons in 2020, whilst at the same time imports dropped from 396,000 tons to 252,000 tons.  The most significant impact from the new olefin and polyolefin plant at Tobolsk was seen in LLDPE exports which rose from 7,690 tons in 2019 to 157,000 tons in 2020 whilst imports dropped slightly from 78,400 tons to 67,000 tons.

Russian LDPE plant outages

Kazanorgsintez (part of the TAIF group) stopped one of the LDPE lines for planned preventive repairs on 16 April.  The shutdown is expected to last at least until mid-May.  The capacity for the LDPE line under maintenance at Kazanorgsintez is 140,000 tpa, with total capacity standing at 225,000 tpa.  HDPE capacity at Kazanorgsintez is designed to produce up to 540,000 tpa.  The next stops for Russian LDPE producers are planned in June and July when the Angarsk Polymer Plant and Gazprom neftekhim Salavat will stop their facilities for repairs. 

Russian Polypropylene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Ufaorgsintez

21.2

21.1

Stavrolen

21.3

18.4

Neftekhimya

24.4

23.9

Nizhnekamskneftekhim

35.7

36.1

Polyom

34.1

33.6

Tomskneftekhim

25.0

24.6

SIBUR-Tobolsk

0.0

89.7

ZapSibNeftekhim

188.6

78.9

Total

350.3

326.3

Russian polypropylene production & trade, Jan-Feb 21

Russian Polypropylene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Ufaorgsintez

21.2

21.1

Stavrolen

21.3

18.4

Neftekhimya

24.4

23.9

Nizhnekamskneftekhim

35.7

36.1

Polyom

34.1

33.6

Tomskneftekhim

25.0

24.6

SIBUR-Tobolsk

0.0

89.7

ZapSibNeftekhim

188.6

78.9

Total

350.3

326.3

In the first two months of 2021, production of polypropylene in Russia increased by 8% and amounted to 350,300 tons.  Production dropped in February to 168,100 tons from 182,400 tons in January.   The Tobolsk polypropylene plants of ZapSibNeftekhim and SIBUR Tobolsk, which have been combined into one division, produced a combined 188,600 tons in the first two months in 2021 which was 14% higher than in the same period in 2020. 

Polyom at Omsk reduced capacity utilisation in February producing 15,900 tons versus 18,200 tons in the previous month.  Nizhnekamskneftekhim produced under 17,200 tons of propylene polymers in February, down from 18,500 tons in January.  Tomskneftekhim produced 11,700 tons of propylene polymers taking the total for January to February to 25,200 tons.  Ufaorgsintez reduced production in February due to propylene shortages but still increased production by 1% in the first two months to 21,400 tons.  Neftekhimya (Kapotnya) increased production by 2% to 24,400 tons 2020 whilst Stavrolen increased production by 15% to 21,200 tons. 

Russian polypropylene production increased by 31% in 2020 to 1.883 million tons against 1.406 million tons in 2019. Six of the eight producers increased capacity utilisation. SIBUR Tobolsk increased production by 8% to 505,100 tons, which is 8% more in 2019 whilst ZapSibNeftekhim at Tobolsk produced 444,600 tons in its first year.  Despite the increase in production, imports of polypropylene into Russia increased 23% to 224,000 tons against 182,800 tons in 2019.  PP-homo imports amounted to 93,000 tons against 59,000 tons whilst imports of block copolymers rose from 54,700 tons to 60,300 tons.  Random copolymer imports amounted to 36,700 tons against 33,800 tons a year earlier.

 

Russian PVC production & trade, Jan-Feb 2021

 

Russian PVC Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Bashkir Soda

45.2

45.5

Kaustik

13.7

15.4

RusVinyl

57.3

62.3

Sayanskkhimplast

53.1

54.7

Total

169.3

177.9

Russian PVC production rose 4% over January to February 2020 in the first two months this year and amounted to 169,200 tons.  RusVinyl produced 26,200 tons of PVC in February, of which 2,500 tons comprised emulsion PVC.  In the first two months 2021 RusVinyl’s PVC production amounted to 57,300 tons in the first two months against 62,300 tons in the same period in 2020.    Sayanskhimplast produced 53,100 tons of PVC in January to February 2021 against 54,100 tons.  Bashkir Soda reduced production by 1% in the first two months to 45,200 tons whilst Kaustik at Volgograd reduced production from 14,500 tons to 13,700 tons. 

Despite the effects of the pandemic Sayanskhimplast increased its net profit in 2020 by 1.7 times to 2.785 billion roubles, after revenues rose by 7.9% to 20.140 billion roubles.  The company’s gross profit rose by 22% to 7.32 billion roubles.   The reasons for the improved financial performance were attributed to the decline in imports down to logistical disruptions allowing domestic PVC prices to rise.

 

Russian PTA imports, Jan-Feb 2021

 

Russian PTA Imports by Country

(unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belgium

0.0

1.0

China

32.0

37.7

South Korea

0.0

3.0

Total

32.1

41.7

PTA imports into Russia amounted to 32,100 tons in the first two months in 2021 versus 41,700 tons in the same period in 2020.  China shipped 32,000 tons in January to February 2021 down from 37,700 tons last year.   Average prices for PTA imports amounted to $580 per ton in January to December 2020 against $627 per ton in the same period in 2019. 

Russian PTA Imports by Region (unit-kilo tons)

Location

Jan-Feb 21

Jan-Feb 20

Kaliningrad

25.3

15.8

Moscow

6.7

22.5

Titan-Polymer, Pskov

Construction work at the site of the Pskov plant Titan-Polymer in the special economic zone Moglino continues.  About 6 billion roubles have already been invested in the project which is expected to see production starting in the third quarter in 2021.  The design capacity of the plant is 72,000 tpa of BOPET film which will increase the demand for PTA and MEG on the Russian market.  BOPET films are currently produced in Russia only in small quantities and are mostly imported.  Further plans beyond BOPET film production for Titan-Polymer include plans to use PET to produce a wide range of staple fibres, polyester yarns (including medical), fabrics, and nonwovens.

Recycled PET Russia

Polief aims to start producing granular PET using recycled materials by the second quarter of 2022.   The company hopes to use about 34,000 tpa of recycled materials.  At present, about 150,000 tpa of PET bottles are processed in Russia of which around only 18% goes to goods and packaging.  To increase the share of recyclable waste, it is necessary both to stimulate the demand for goods from secondary raw materials, and to tighten regulation in relation to non-recyclable packaging. 

Russian Benzene Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

16.2

15.7

Gazprom Neft

16.3

14.3

Stavrolen

0.0

12.9

LUKoil-Permnefteorgsintez

9.1

10.1

Magnitogorsk MK

7.3

8.4

Nizhnekamskneftekhim

50.0

50.7

Novolipetsk MK

0.7

0.3

Gazprom n Salavat

34.5

37.4

Severstal

5.2

6.1

SIBUR-Holding

13.3

18.1

Slavneft-Yaroslavlorgsintez

12.9

11.1

Surgutneftegaz

10.5

8.9

Ryazan RN Holding

6.0

7.1

Ufaneftekhim

16.1

16.1

Ural Steel

1.7

2.2

Uralorgsintez

16.1

15.6

Zapsib

12.6

12.1

Novokuibyshevsk Petrochemical

3.1

3.3

Total

231.6

250.4

Evroplast, which controls the Senezh PET plant at Solnechnogorsk near Moscow region, is the first company in Russia on the packaging market that operates according to the principles of a circular economy.  This means using its own recycled raw materials for the production of PET preforms plastic bottles and polymer packaging.  Currently, seven Evroplast preform factories are operating at full capacity in Russia: in Vladivostok, Kazan, Krasnoyarsk, Moscow, St. Petersburg, Yekaterinburg, and Rostov-on-Don.  

 

Russian benzene production Jan-Feb 2021

 

Russian Benzene Producer Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Polymer Plant

10.2

10.3

SIBUR-Kstovo

12.8

16.4

Severstal

5.5

6.5

Uralorgsintez

16.9

15.0

Kirishinefteorgsintez

2.7

1.8

West Siberian MC

11.7

11.9

Ryazan NPZ

6.0

6.7

Slavneft-Yanos

13.0

11.6

Gazprom Neft (Omsk)

14.9

14.1

Gazprom neftekhim Salavat

6.4

9.4

Stavrolen

0.0

10.9

Nizhnekamskneftekhim

4.0

4.4

Ufaneftekhim

0.2

0.9

Karpatneftekhim

0.0

1.5

Belarus

5.8

0.0

Atyrau

2.5

7.6

Chelyabinsk MK

2.5

1.3

Altay-Koks

1.4

6.2

Koks

5.3

4.9

Magnitogorsk MK

7.8

8.9

Nizhny Tagil MK

2.4

3.4

Ural Steel

0.3

0.0

Full Total

132.2

153.5

Russian benzene production totalled 231,600 tons in the first two months in 2021 versus 250,400 tons in the same period in 2020.   Nizhnekamskneftekhim produced 50,000 tons against 50,700 tons whilst Gazprom neftekhim Salavat reduced production from 37,400 tons to 34,500 tons.  Rosneft’s benzene plants at Angarsk, Novokuibyshevsk, Ufa and Ryazan produced a combined total of 41,400 tons against 42,200 tons in January to February 2020, whilst Gazprom Neft at the Omsk refinery increased benzene production from 14,300 tons to 16,300 tons.

Regarding domestic merchant sales, Russian benzene producers shipped 132,500 tons in the first two months in 2021 against 153,500 tons in the same period in 2020.  A number of factors contributed to the lower sales volumes on the domestic market including plant outages and increased internal processing.

SIBUR-Kstovo reduced sales from 16,400 tons in the first two months in 2020 to 12,800 tons in the same period in 2021, whilst Stavrolen at Budyennovsk did not sell any product in the first two months in 2021 after shipping 10,900 tons in January to February last year.  Stavrolen has not produced benzene for several months.

Regarding import activity the Atyrau refinery in Kazakhstan reduced sales on the Russian market to 2,500 tons in the first two months in 2021 against 7,600 tons in the same period in 2020.  The Atyrau refinery encountered technical problems in the first quarter which restricted exports of benzene and paraxylene, particularly to Russia in March.   Benzene from Belarus to Russia from the Naftan and Mozyr refineries amounted to 5,800 tons in the first two months in 2021 against zero activity in the same period in 2020.  Belarus is currently producing more benzene than it needs for caprolactam production.

Overall supply availability of benzene on the Russian merchant domestic market has tightened this year.  At the beginning of March, spot batches of benzene with the Volga Federal District were sold for 76,000-77,000 roubles per ton, but in the second half of the month SIBUR-Kstovo and Gazprom neftekhim Salavat sold additional volumes of 79,000-84,000 roubles per ton.    In April, the supply side was helped by the scheduled shutdown at the Kemerovo caprolactam plant which reduces demand for merchant benzene.    

Kuibyshevazot reduced benzene purchases from 36,300 tons to 28,100 tons in January to February this year whilst Azot at Kemerovo increased purchases from 23,200 tons to 25,700 tons.  Shchekinoazot reduced purchases from 19,100 tons to 13,200 tons.  For the production of cumene Kazanorgsintez purchased 14,200 tons of benzene in January to February 2021, versus 12,900 tons in 2019.  In the styrene sector SIBUR-Khimprom at Perm purchased 16,500 tons of benzene in January-February 2021 against 17,100 tons in the same period in 2020. 

 

Russian caprolactam production, Jan-Feb 2021

 

Russian Caprolactam Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Kuibyshevazot

35.2

35.8

Shchekinoazot

9.9

9.5

SDS Azot

21.9

21.9

Total

67.0

67.2

Russian caprolactam production amounted to 67,000 tons in January to February 2021 against 67,200 tons in the same period in 2020.  Kuibyshevazot reduced caprolactam production from 35,800 tons to 35, 200 tons whilst SDS Azot at Kemerovo was unchanged at 21,900 tons.  Kuibyshevazot uses most of its caprolactam production in internal processing in the production of polyamide whilst Azot at Kemerovo and Shchekinoazot export most of its production.

 

Russian orthoxylene market, Jan-Oct 2020

 

Russian Orthoxylene Domestic Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Gazprom Neft

16.2

19.3

Ufaneftekhim

6.3

18.1

Kirishinefteorgsintez

7.5

0.1

Total

30.1

37.5

Orthoxylene export sales from Russia amounted to 30,100 tons in January to February 2021 against 37,500 tons in the same period in 2020.  Gazprom Neft reduced shipments to 16,200 tons against 19,300 tons in the same period in 2020 whilst Ufaneftekhim reduced sales from 18,100 tons to 6,300 tons.

Russian Phthalic Anhydride Production (unit-kilo tons)

Consumer

Jan-Feb 21

Jan-Feb 20

Kamteks-Khimprom

2.4

2.4

Gazprom neftekhim Salavat

16.8

15.6

Roshalsky Plasticizer Plant

2.0

0.0

Total

21.1

18.0

The major consumer on the domestic market Kamteks-Khimprom, which uses orthoxylene for the production of phthalic anhydride reduced purchases from 78,800 tons in 2019 to 67,200 tons in 2020.  Gazprom neftekhim Salavat reduced purchases from 13,300 tons to 11,500 tons.

Russian Toluene Domestic Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Slavneft-Yanos

4.4

3.4

Severstal

0.3

3.3

LUKoil-Perm

8.0

5.2

Gazprom Neft

9.5

6.6

Zapsib

0.9

2.4

Kinef, Kirishi

4.9

3.0

Total

28.0

23.9

Russian production of phthalic anhydride increased in the first two months in 2021 to 21,000 tons against 18,000 tons in the same period in 2020.  The main reason for the increase was due to the start-up of phthalic anhydride production at Roshalsky Plasticizer Plant.

Russian toluene market, Jan-Feb 21

 Russian toluene sales on the domestic merchant market increased in the first two months in 2021 to 28,000 tons from 23,900 tons in the same period in 2020.   Gazprom Neft increased domestic sales to 9,500 tons from 6,600 tons in the same period in 2020 whilst Lukoil-Perm increased shipments from 5,200 tons from 8,000 tons. 

Russian phenol market, Jan-Feb 21

Russian Phenol Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Ufaorgsintez

12.6

10.8

Kazanorgsintez

13.9

12.9

Novokuibyshevsk Petrochemical

12.8

12.9

Omsk Kaucuk, Omsk

4.7

6.9

Total

44.0

43.4

Russian phenol production amounted to 44,000 tons in the first two months in 2021 against 43,400 tons in the same period in 2020.  Novokuibyshevsk Petrochemical produced 12,800 tons of phenol against 12,900 tons in the same period om 2020 whilst Ufaorgsintez increased production from 10,800 tons to 12,600 tons.  Kazanorgsintez increased slightly from 12,900 tons to 13,900 tons.  Regarding domestic market prices the benzene contract price in Europe has helped drive up phenol numbers. The estimated increase in the selling price of phenol can exceed 10,000 roubles. 

 

Russian rubber market Jan-Feb 2021

 

Russian Synthetic & Natural Rubber Market (unit-kilo tons)

 

Jan-Feb 21

Jan-Feb 20

 Production

296.0

266.0

 Exports

174.8

140.4

 Imports

30.3

30.6

 Supply/Demand Balance

151.5

156.2

The production of synthetic rubber in February decreased by 8.9% versus January and amounted to 141,000. In total, in January-February, 296,000 tons of synthetic rubbers were produced, which is 11.2% more than in the same period last year. 

For the early part of 2021 butadiene spreads have become very attractive for the production of styrene-butadiene rubber. Thus, styrene butadiene rubber (ESBR 1502), which is widely used in the production of tyres, is currently more expensive than in early 2020 and late 2019.  Synthetic rubber prices for both domestic and export markets have been helped by reduced production of natural rubber in 2020.

Butadiene supply in Russia has tightened from higher synthetic rubber production forcing imports in April from MOL in Hungary.  A batch of 1,000 tons was delivered to Voronezhsintezkaucuk and another 700 tons sent to Omsk Kaucuk. 

The Ministry of Energy of the Russian Federation is considering options in 2021 options for tax support for synthetic rubber producers, including the mechanism of reverse excise duty.  The aim is to incentivise producers to increase production volumes.   

Russian rubber consumption Jan-Feb 2021

Russian Tyre Production (unit-mil pieces)

Product

Jan-Feb 21

Jan-Feb 20

Car Tyres

6.8

6.3

Lorry tyres

1.1

1.1

Agricultural tyres

0.3

0.3

Total

8.2

7.7

Russian Tyre Production (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Car Tyres

54.0

50.0

Lorry tyres

8.9

8.9

Agricultural tyres

2.1

2.0

Total

64.9

60.9

Although consumption of rubber dropped overall in the first two months in 2021 to 151,500 tons against 156,200 tons in January to February 2020 the tyre sector recorded an increase in consumption from 60,900 tons to 64,900 tons. 

In February, 3.8 million tyres and pneumatic tyres for passenger cars were produced, which is 24.8% more than in January and 1.3% more than in February 2020.  In the first two months, the production of passenger tyres increased by 8.1% compared to the previous year.

In February, 575,000 tyres and pneumatic tyres for buses, trolley buses and trucks were produced, which is 5.8% more than last month and 9.7% less than February 2020.  

In total, in January-February, tyre production in the large vehicle segment decreased by 0.7%.  Regarding the agricultural sector 132,000 tyres were produced in February 2020, which is 3.8% more than in January.  In total, the production of agricultural tyres increased in the first two months by 2.9%.

Russian synthetic rubber exports, Jan-Feb 2021

Russian Synthetic Rubber Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

E-SBR

7.6

7.1

Block

10.9

5.8

SSBR

0.7

0.8

SBR

19.1

12.1

Polybutadiene

45.0

35.7

Butyl rubber

16.9

13.9

Halogenated butyl

23.0

23.5

NBR

5.3

5.4

Isoprene

45.5

34.7

Others

0.1

0.0

Total

174.1

139.0

Russian exports of synthetic rubber amounted to 174,100 tons in the first two months in 2021, up from 139,000 tons in the same period in 2020.  Average prices for Russian synthetic rubber exports dropped from $1511 per ton in January to February 2020 to $1497 in the same period in 2021.  As a result of higher volumes and prices, revenues from synthetic rubber exports rose from $212 million in January to February 2020 to $261.2 million in January to February 2021.  Regarding shipment destinations China represented the largest market for Russian exporters in 2020, accounting for nearly 22.3% of total sales. 

Russian Synthetic Exports by Destination (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belarus

5.4

3.5

Brazil

6.2

3.9

China

23.4

19.9

Czech

5.9

4.8

Germany

5.7

5.1

Hungary

9.2

5.9

India

21.7

15.1

Mexico

5.9

5.1

Poland

18.6

14.9

Romania

5.0

6.3

Serbia

2.4

3.1

Slovakia

6.1

5.9

Turkey

15.8

8.3

Ukraine

3.4

2.3

US

5.7

6.2

Others

34.2

30.0

Total

174.8

140.3

Exports to China amounted to 23,400 tons in the first two months in 2021 against 19,900 tons in the same period in 2020.  This was followed by India, rising from 15,100 tons to 21,700 tons, and Poland rising from 14,900 tons to 18,600 tons.

Nizhnekamskneftekhim-rubber exports Jan-Feb 2021

Nizhnekamskneftekhim’s exports of synthetic rubbers rose in the first two months to 113,200 tons from 89,800 tons in the same period in 2020.  Isoprene rubber exports rose from 28,500 tons to 39,500 tons whilst butadiene rubber exports increased from 25,700 tons to 36,800 tons.  Revenues from synthetic rubber exports rose from $145.4 million last year to $169.9 million in the same period this year.  The rise in revenues would have been greater had it not been for the drop in revenues from halogenated butyl rubber sales from $54.0 million to $44.8 million.   

Nizhnekamskneftekhim Rubber Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Isoprene Rubber

39.5

28.5

Butyl Rubber

11.7

11.8

HBR

23.1

23.5

Polybutadiene

36.8

25.7

Others

2.2

0.3

Total

113.2

89.8

Nizhnekamskneftekhim’s butyl rubber plant launched a new brand of BBC 246 bromobutyl rubber in March.  The brand of BBC 246 bromobutyl rubber was sent to one of the consumers for homologation. Final plans for the number of products of this brand will be formed after production tests by the consumer.

The Court of Arbitration of Tatarstan reduced from 1.5 billion roubles to 1.29 billion roubles the amount of the fine that the FAS of Russia imposed on Nizhnekamskneftekhim in 2020 for violations in the synthetic rubber market.  This follows the dispute in 2019 between Nizhnekamskneftekhim and Tatneft and its tyre plants in Tatarstan.  Tatneft’s conflict with Nizhnekamskneftekhim over pricing for isoprene and butyl rubber was a key factor in deciding to purchase its own facilities for the production of these products at Togliatti.

Nizhnekamskneftekhim-thermoelastomers

The first batch of thermoelastomers (TPP) was produced by Nizhnekamskneftekhim from its new 10,000 tpaplant in March 2021.  These products are used for the manufacture of road surfaces, which improves the quality and durability of asphalt. Thermoelastomers are also used in the production of roofing materials.  The process of obtaining thermoelastomers at Nizhnekamskneftekhim is fully automated whereby ready pellets are packed on a special packing line in a special soft container in big bags.   Key features of the TPP include high mechanical strength and the ability to recycle multiple without harming the environment.

 

Togliattikaucuk-rubber exports Jan-Feb 2021

 

Togliattikaucuk Rubber Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Isoprene Rubber

0.8

0.9

Butyl Rubber

5.2

2.0

SBR

3.8

1.4

Others

0.0

0.0

Total

9.7

4.3

Togliattikaucuk exported 9,700 tons of synthetic rubber in the first two months in 2021 against 4,300 tons in the same period in 2020. Butyl rubber exports from Togliattikaucuk rose from 2,000 tons to 5,200 tons and SBR exports rose from 1,400 tons to 3,800 tons. 

 

 

Russian methanol production Jan-Feb 2021

 

Russian Methanol Production

(unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Shchekinoazot

162.7

168.3

Sibmetakhim

166.0

159.4

Metafrax

204.1

206.0

Akron

16.7

18.0

Azot, Novomoskovsk

49.3

50.6

Angarsk Petrochemical

8.1

11.0

Azot, Nevinnomyssk

23.3

22.0

Tomet

80.8

157.5

Ammoni

25.2

19.8

Totals

736.2

812.6

Russia produced 736,200 tons of methanol in the first two months in 2021 against 812,600 tons in same period in 2020.  The decline was due primarily to the lower production from Tomet, reducing production at Togliatti from 157,500 tons in January-February 2020 to 80,800 tons.  

In the first half of April, Tomet started maintenance on the one line that had been operating continously, with the second line having restarted at the end of March after an idle period of six months.  Both methanol units for Tomet were stopped in October 2020 due to non-technical factors.  Then when trying to restart in December the second unit encountered an accident and was disabled.

In the Urals Metafrax produced 204,100 tons of methanol against 206,000 tons in January-February 2020 whilst in Siberia Sibmetakhim at Tomsk increased production from 159,400 tons to 166,000 tons.  In the Tula Oblast Shchekinoazot reduced methanol production volumes from 168,300 tons in January to February 2020 to 159,400 tons in the same period in 2021.   Ammoni in Tatarstan increased methanol production from 19,800 tons in January to February 2020 to 25,200 tons.  Ammoni was taken over last year by the Trotsenko group and is currently preparing a second large scale project for ammonia and urea.  Methanol may be excluded from this plant. 

Tomet-major changes in second quarter in 2021

Tomet Methanol Sales (unit-kilo tons)

Domestic buyer

Jan-Feb 21

Jan-Feb 20

Nizhnekamskneftekhim

11.1

5.5

Togliattikaucuk

14.0

27.4

Novokuibyshevsk Petrochem

4.8

7.1

Others

31.8

42.5

Total Domestic

61.7

82.6

Export Sales

24.9

66.0

The start-up of the second line for Tomet in March was facilitated by pipeline repairs being unexpectedly completed by Togliattiazot, the industrial base where is located.  This allowed gas to flow to the methanol unit.  In December 2020, Tomet tried to launch the second line but was not possible after partial destruction of gas pipelines occurred.  The bankruptcy management of the plant started on 9 March and was set the goal of restarting the second line which took place around 26 March.  Aside some repairs on the second line the restart would not have been possible without a resumption of gas supply from Togliattiazot.   Tomet receives its natural gas from the system used by Togliattiazot.

Tomet is currently undergoing a one-month shutdown of the first line.  The capacity of the second line is 1150 tons per day which will allow Tomet to produce a total of 2,500 tons per day after the completion of the maintenance on the first line.   The return to service of the second unit will not only benefit the company and the workforce, but also stabilize the situation on the Russian domestic market.

After completing the maintenance outage on the first line the construction of a new facility will begin for a methanol loading station for tank trucks.  Until now, Tomet operated only a loading rack for railway tank cars.  With the construction of a new overpass, Tomet will be able to carry out more constant shipments and aims to be more flexible in responding to the demands of the domestic market.   The facility could be put into operation in June, but much will depend on the approval of the construction stages by the relevant departments.  

Future ownership of Tomet remains in question but for the time being the plant will run normally.  Creditors met on 1 April and made a decision to continue the production and economic activities of the plant.  This strategy provides for the preservation of production and the workforce, as well as the development and renovation of the production complex of the plant.  In the first two months in 2021 Tomet reduced sales on the domestic market from 82,600 tons last year to 61,700 tons whilst export sales dropped from 66,000 tons to 24,900 tons.   The largest domestic buyer from Tomet is Togliattikaucuk. 

 

Russian methanol exports, Jan-Feb 2021

 

Russian Methanol Exports by Producer

(unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Azot Nevinnomyssk

2.3

0.0

Azot Novomoskovsk

16.7

14.3

Akron

1.1

2.9

Metafrax

84.0

83.8

Sibmetakhim

79.5

81.4

Tomet

24.9

66.0

Shchekinoazot

117.0

130.3

Ammoni

0.0

0.0

Total

325.5

378.7

Export shipments of Russian methanol from producers totalled 325,500 tons in the first two months against 378,700 tons in the same period last year.  Average prices rose from $198 per ton in January-February 2020 to $278 in 2021.   

Tomet reduced exports from 66,000 tons in January to February 2020 to 24,900 tons in the same period this year accounting for the large part of the decline in Russian exports.  Tomet is normally a reasonably sized exporter but was forced to reduce exports due to lower production.  The overall effect of lower exports from Tomet was to reduce the average ratio of exports to around 41% as a share of Russian methanol production.    

Russian Methanol Export Destinations (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belarus

22.2

15.3

Finland

150.1

157.1

Germany

0.8

0.5

Kazakhstan

3.8

9.2

Latvia

4.1

1.5

Lithuania

17.5

11.8

Netherlands

4.6

28.8

Poland

52.4

50.4

Romania

3.6

14.1

Slovakia

24.5

28.6

Spain

0.0

1.4

Turkey

3.6

7.2

UK

0.0

5.0

Ukraine

9.6

7.4

Others

4.8

0.9

Total

301.7

339.1

Metafrax exported 84,000 tons of methanol in the first two months in 2021 versus 83,800 tons last year, whilst Sibmetakhim reduced shipments from 81,400 tons to 79,500 tons.  Shchekinoazot, Russia’s largest exporter of methanol at present, reduced shipments from 130,300 tons to 117,000 tons in January-February 2021. 

The main destination for Russian methanol exports remains Finland where based on customs statistics volumes totalled 150,100 tons in the first two months in 2021 against 157,100 tons in the same period in 2020.   Poland increased purchases from Russia to 52,400 tons in January to February 2021 against 50,400 tons in the same period last year, whilst Slovakia reduced volumes from 28,600 tons to 24,500 tons.  Romania reduced imports from Russia from 14,200 tons to 3,600 tons in January to February 2021.

Russian methanol domestic sales, Jan-Feb 2021

Sales of methanol on the domestic market amounted to 307,000 tons in the first two months in 2021 against 280,000 tons in the same period in 2020.  Despite a drop in sales by Tomet from 83,300 tons to 61,700 tons sales from several other producers increased. 

Metafrax increased domestic merchant sales from 62,500 tons to 73,500 tons whilst Sibmetakhim increased shipments to domestic customers to 84,400 tons from 67,800 tons.  Shchekinoazot increased merchant domestic sales from 22,700 tons to 33,300 tons and in Tatarstan Ammoni was due to higher production volumes was able to increase sales from 6,300 tons to 17,900 tons. 

Russian Methanol Domestic Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Azot Nevinnomyssk

4.3

4.6

Azot Novomoskovsk

32.0

32.6

Metafrax

73.5

62.5

Sibmetakhim

84.4

67.8

Tomet

61.7

83.3

Shchekinoazot

33.3

22.7

Ammoni (Mendeleevsk)

17.9

6.3

Total

307.0

280.0

Nizhnekamskneftekhim increased methanol merchant purchases from 38,900 tons in the first two months in 2020 to 60,900 tons in the same period in 2021.  The rise in purchases was due mainly to increased production of isoprene monomer. 

Gazprom increased purchases of methanol for gas hydrates in Siberia from 30,900 tons in January-February 2020 to 33,300 tons this year.  All of the methanol purchased by Gazprom is sourced from Sibmetakhim, which is part of the same group and is sometimes called Gazprom Methanol.  Also in Siberia, Urengoy based company North Gas raised a tender in April for 2,000 tons of methanol to be delivered by the end of December 2021.  The tender date was 23 April.

Russian Methanol Domestic Buyers (unit-kilo tons)

Consumer

Jan-Feb 21

Jan-Feb 30

Nizhnekamskneftekhim

60.9

38.9

Togliattikaucuk

20.6

26.9

Uralorgsintez

12.1

12.9

SIBUR-Khimprom

2.4

3.3

SIBUR Tobolsk

5.4

7.9

Omsk Kaucuk

13.3

16.1

Novokuibyshevsk NPZ

7.5

7.8

Uralkhimplast

4.4

3.1

Metadynea

18.4

13.9

Kronospan

23.3

16.7

Gazprom

33.3

30.9

Khimsintez

1.4

2.0

Volzhsky Orgsintez

1.5

2.3

Others

102.6

97.5

Total

307.0

280.0

In the formaldehyde resin sector Metadynea increased methanol purchases from 13,900 tons to 18,400 tons whilst Kronospan increased from 16,700 tons to 23,300 tons.  The Novomoskovsk methanol plant is the major supplier to both Metadynea and Kronospan.  Over the next three years Metadynea to increase the production of phenol formaldehyde resins by around a third at its Orekhovo-Zuyevo plant. 

Uralkhimplast purchased 4,400 tons of methanol in the first two months in 2021 against 3,100 tons last year, most of which was supplied by Metafrax.  Uralkhimplast achieved a net profit of 364.3 million roubles in 2020, which is 29.7% more than in 2019.  Revenue decreased by 9.7%, to 4.63 billion roubles, but costs dropped by 16.3% to 3.18 billion roubles.   In 2020, the company reduced the production of basic products: synthetic resins and plastics by 12.4% to 71,790 tons, phenol-formaldehyde resins by 6.9% to 60,280 tons, and formalin by 15.7% to 45,400 tons.

Ruskhim methanol project & non-freezing port

For the proposed methanol project near Indiga on the coast of Yamal-Nenets Ruskhim aims to develop a gas pipeline of around 290 km from Korovinskoye and Kuyumzhinskoye gas fields.  The project consists of three components: the development of the field, the transportation of gas and its processing.  In recent years, plans to build a non-freezing port in Indiga have been under consideration which is critical for the Ruskhim methanol project.  It is clear that Indiga itself does not need methanol, and the plant prospects are interlinked with the development of a deep-sea non-freezing port. As for the construction of the port, research is close to being completed which allow the project to move into the design stage.

Nakhodka fertiliser and methanol project-local opposition

Local people in Nakhodka continue to oppose the construction of the NSMU fertiliser and methanol project on both economic and environmental grounds.  Opponents to the planned project claim there is no economic advantage when the plant is in operation, whilst the construction process is heavily weighted to Chinese workers.  Simply for construction alone facilities have been established for 900 Chinese workers and only 200 Russian workers, most of whom will come from outside the area. 

On environmental grounds opponents cite the dangers of constructing large gas-chemical facilities close to population density.  Efforts to try and appease project opponents have thus far failed who do not believe in a safe plant where several million tons of chemicals are produced.  Residents in Nakhodka have been suffering from coal dust for many years although official monitoring does not show excesses of harmful substances. 

Other arguments against the NSMU project include opposition to the fact that the plant is being constructed with Chinese investment and essentially for the Chinese market.  Profits will go back to China and Moscow, but local people will see little if any benefit.  Moreover, Nakhodka has its own traditional activities: ship repair, active marine fishing base, and this is where residents want investment.  China has such a poor record on the environmental records of chemical plants that there is zero confidence in this project, even if it seems likely to go ahead.  

Russian butanol production Jan-Feb 2021

Russian N-Butanol Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Petrochemical Company

6.0

4.3

Azot Nevinnomyssk

3.3

3.0

Gazprom neftekhim Salavat

12.4

10.9

SIBUR-Khimprom, Perm

4.8

6.1

Total

26.5

24.3

     

Russian Isobutanols Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Angarsk Petrochemical Company

2.7

2.3

Gazprom neftekhim Salavat

5.7

6.2

SIBUR-Khimprom, Perm

4.4

8.9

Total

12.8

17.4

Russian normal butanol production totalled 26,500 tons in January to February 2021, against 24,300 tons in the same period in 2020.  Gazprom neftekhim Salavat was the largest Russian producer, producing 12,400 tons against 10,900 tons in January to February 2020.   Gazprom neftekhim Salavat and SIBUR-Khimprom will stop production for planned repairs in May.   

Russian Butanol Consumption (unit-kilo tons)

Consumer

Jan-Feb 21

Jan-Feb 20

Akrilat

2.3

3.1

Dimitrievsky Chemical

3.6

4.6

Volzhskiy Orgsintez

1.2

2.0

Roshalsjy Plant of Plasticizers

0.3

0.5

Others

1.8

2.7

Total

9.2

13.0

Isobutanol production in Russia dropped from 17,400 tons to 12,800 tons in January to February 2021.  Gazprom neftekhim Salavat reduced production to 5,700 tons from 6,200 tons, and SIBUR-Khimprom reduced from 8,900 tons to 4,400 tons. 

Russian domestic butanol sales, Jan-Feb 21

Russian Butanol Domestic Sales (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Gazprom n Salavat

1.2

1.5

SIBUR-Khimprom

3.3

5.9

Angarsk Petrochemical Company

4.5

5.1

Azot Nevinnomyssk

0.1

0.5

Totals

9.1

13.0

Merchant normal butanol sales on the domestic market dropped in the first two months in 2021 to 9,200 tons from 13,000 tons in the same period in 2020.  The largest butanol buyer on the domestic market remains Dimitrievsky Chemical which took 3,600 tons against 4,600 tons of deliveries in January-February 2020 whilst Akrilat at Dzerzhinsk reduced purchases from 3,100 tons to 2,300 tons.  

Angarsk Petrochemical was the largest supplier of butanols in the first two months shipping 4,500 tons to 5,100 tons whilst SIBUR-Khimprom reduced sales from 5,900 tons to 3,300 tons.  Since March butanol availability on the domestic merchant market has been extremely tight with hardly any free volumes on the market.  

Both SIBUR-Khimprom and Gazprom neftekhim Salavat direct almost the entire volume of n-butanol produced to internal processing.  The Angarsk Petrochemical Plant does not supply isobutanol to the free domestic market and finds it more economical  to ship almost all products for export.

 

Russian acetone production & exports, Jan-Feb 2021

 

Russian Acetone Production (unit-kilo tons)

Producer

Jan-Feb 21

Jan-Feb 20

Ufaorgsintez

7.9

6.8

Kazanorgsintez

8.8

8.1

Novokuibyshevsk Petrochemical

7.9

8.1

Omsk Kaucuk

2.9

4.1

Total

27.6

27.0

Russian acetone production amounted to 27,600 tons in the first two months tons in 2021 against 27,000 tons in the same period in 2020.  Omsk Kaucuk produced 2,900 tons of acetone down from 4,100 tons due to technical problems.   Ufaorgsintez increased production from 6,800 tons to 7,900 tons whilst Kazanorgsintez increased from 8,100 tons to 8,800 tons. 

Exports of acetone amounted to 9,900 tons in the first two months in 2021 against 9,000 tons in the same period in 2020.   Solvent distributor Dimitrievsky Chemical buys acetone from the producers and then exports, whilst all the producers with the exception of Omsk Kaucuk export in reasonable volumes.  The Netherlands was the major destination for Russian acetone exports in the first two months this year, accounting for 4,000 tons, followed by Belarus with 2,300 tons.  On the domestic market the Moshim is one of the largest merchant buyers of acetone, which it repackages and mixes with other solvents for market distribution. 

Russian Acetone Exports

(unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belarus

2.3

2.3

Netherlands

4.0

1.8

Turkey

0.0

2.0

Latvia

2.1

0.3

Others

1.4

2.6

Total

9.9

9.0

Russian isopropanol market & imports Jan-Feb 2021

Russian imports of isopropanol amounted to 5,510 tons in the first two months in 2021 for $7.1 million, rising from 4,000 tons in the same period last year for $2.8 million. 

Imports are expected to decline in 2021 due to the availability of domestic production at Omsk, although the plant has incurred technical problems in the first few months of operation.  Novokuibyshevsk Petrochemical Company is now considering the installation of another plant for isopropyl alcohol.

 

Russian organic chemical trade, Jan-Feb 2021

 

Russian MEG Imports (unit-kilo tons)

By region

Jan-Feb 21

Jan-Feb 20

Kaliningrad

12.0

5.3

Others

0.2

0.1

Total

12.2

5.4

By country

Jan-Feb 21

Jan-Feb 20

Saudi Arabia

9.1

5.3

Others

3.2

0.1

Total

12.2

5.4

Russian Cumene & Phenol Exports 2021

Cumene

Jan

Feb

Kilo tons

1.6

4.2

$ million

1.2

2.4

Price $/ton

745.3

575.5

Phenol

Jan

Feb

Kilo tons

1.6

2.6

$ million

1.3

1.5

Price $/ton

792.7

572.5

MEG imports into Russia rose from 5,400 tons in the first two months last year to 12,200 tons in the same period in 2021.  PET producer Ekopet in Kaliningrad has been the main buyer of imported MEG for the last few years whilst Saudi Arabia has been the main supplier accounting for more than 90% of shipments.  Russia also exports MEG but dropped from 21,170 tons in the first two months last year to 11,400 tons in January to February 2021.  Belarus accounted for 68% of export shipments over the past twelve months, followed by Kazakhstan and Lithuania.  The leading exporter of Russian MEG is SIBUR-Kstovo followed by Nizhnekamskneftekhim.   

Cumene exports from Russia totalled 5,400 tons in the first two months in 2021, with prices dropping from $745.3 per ton in January to $575.5 in February.  Cumene and phenol prices are mostly in alignment whilst acetone numbers tend to be lower.  All of the cumene exported from Russia this year has come out of the Novokuibyshevsk plant. 

Caprolactam exports from Russia totalled 27,300 tons in the first two months in 2021, down from 41,100 tons in the same period last year.  Exports have been lower due to lower production and increased internal processing particularly by Kuibyshevazot and its subsidiaries.  Kuibyshevazot reduced exports from 9,000 tons to 4,000 tons this year. Another factor was the absence of activity from Azot at Kemerovo in January due to technical reasons, thus exporting only 13,300 tons in the first two months against 22,900 tons in January-February 2020.  China accounts for around 60% of Russian caprolactam exports followed by Taiwan with around 30%.    

 

Russian TDI-MDI imports, Jan-Feb 2021

 

Russian TDI Imports (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belgium

0.1

0.0

China

2.8

0.0

France

0.0

0.1

Germany

0.5

0.0

Hungary

1.6

2.1

Netherlands

2.1

1.6

Saudi Arabia

0.6

0.0

South Korea

2.2

1.2

Turkey

0.0

0.2

US

1.6

0.0

Others

0.0

1.4

Total

9.9

7.3

Russian TDI imports amounted to 9,914 tons in the first two months in 2021 against 7,266 tons in the same period in 2020.  Values of Russian TDI imports rose from a total of $13.6 million in January to February 2020 to $24.8 million, with average prices per ton rising from $1861 to $2493.  The upward trend in pricing started in the third quarter last year.

Import sources for TDI in the first two months in 2021 were broadly spread between China, South Korea, the Netherlands, Hungary and the US. 

Russian Imports of MDI

(unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Belgium

2.3

0.6

China

2.9

3.7

Germany

3.2

3.0

Hungary

0.7

0.7

Japan

0.4

0.2

Netherlands

5.6

2.7

Portugal

0.7

0.0

Saudi Arabia

4.7

5.2

South Korea

0.2

0.1

Others

0.9

0.0

Total

21.7

16.2

MDI imports into Russia rose to 21,653 tons in January to February 2021 from 16,188 tons in the same period in 2020.  Values of Russian MDI imports amounted to $40.7 million in the first two months rising from $23.2 million, with average prices per ton rising from $1444 to $1874. 

The Netherlands was the largest supplier to the Russian market, shipping 5,600 tons in the first two months against 2,700 tons last year whilst Saudi Arabia reduced shipments to 4,700 tons from 5,200 tons.  This was followed by China with 24.5% of import volumes and the Netherlands with 19%.    The largest region for Russian MDI imports in 2020 was the Vladimir Oblast followed by Moscow.  In the first two months in 2021 the Vladimir Oblast accounted for 41.2% of MDI imports into Russia.

 

Ukrainian polymer imports & production, Jan-Feb 2021

In the first two months of 2021 imports of PVC to Ukraine decreased by 43% compared to 2020 and amounted to 4,700 tons against 8,300 tons.  At the same time Karpatneftekhim exported 41,700 tons of PVC in the first two months against 42,300 tons a year earlier.

Ukrainian Polypropylene Imports (unit-kilo tons)

Category

Jan-Feb 21

Jan-Feb 20

Homo

15.6

16.8

Block

1.6

1.6

Random

1.7

2.0

Other

0.4

0.2

Total

19.3

20.4

Polypropylene imports amounted to 19,300 tons in the first two months in 2021 against 20,400 tons in the same period in 2020.  In February, PP imports to Ukraine increased to 10,500 tons against 8,800 tons in January.  Homopolymer imports dropped 5% the first two months to 15,600 tons, whilst imports of copolymers were the same at 1,600 tons.  Imports of stat-copolymers dropped from 2,000 tons in January to February 2020 to 1,700 tons in 2021.  

In the first two months of 2021 imports of polyethylene into Ukraine amounted to 34,900 tons, which is 13% lower than the 39,900 tons imported in 2020.  HDPE imports dropped from 15,900 tons to 10,900 tons whilst LDPE imports amounted to 11,600 tons against 12,500 tons a year earlier.  LLDPE imports comprised 5,800 tons in February against 4,700 tons in January, with supplies rising from 9,500 tons for the first two months last year to 10,500 tons.  Imports of other types of polyethylene including ethylene-vinyl acetate (EVA), amounted to 1,900 tons against 2,000 tons in 2020.

 

Karpatneftekhim Jan-Feb 2021

 

Karpatneftekhim Petrochemical Exports

(unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Propylene

19.1

15.2

Benzene

16.4

5.3

Karpatneftekhim exported 19,100 tons of propylene in the first two months in 2021 against 15,200 tons in the same period in 2020, whilst benzene imports rose from 5,300 tons to 16,400 tons.  The largest share of propylene shipments was exported to Poland.  About 5,000 tons of benzene was loaded onto a tanker in January at the Ukrainian port of Chornomorsk in mid-January was delivered to Porto Marghera (Italy).  Karpatneftekhim intends to increase purchases of butane in 2021 due to the rise in the price of naphtha.

Belarussian chemical production, Jan-Feb 2021

Belarussian Petrochemical Production (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Ethylene

24.2

12.5

Propylene

14.5

7.4

Benzene

18.0

13.0

Caprolactam

13.0

14.2

OX

5.7

3.1

PX

7.4

9.0

Methanol

16.4

14.5

Ethylene production in Belarus increased in the first two months to 24,200 tons from 12,500 tons in January to February 2020 whilst propylene increased from 7,400 tons to 14,500 tons in 2020.  Benzene production

rose from 13,000 tons to 18,000 tons. Paraxylene production at the Naftan refinery dropped in January to February 2021 to 7,400 tons from 9,000 tons.

Belarus maintains medium term plans to build an ethylene-propylene plant at the Polimir plant.  Implementation of this project will increase the production of LDPE.  The overall outline of the project includes capacities of 200,000 tons for ethylene and 100,000 tpa for propylene.  Construction has been marked for  2023, although highly provisional at this stage. 

 

Belarussian aromatic trade Jan-Feb 21

 

Belarussian Xylene Imports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

OX

3.0

2.2

PX

4.3

1.9

In January-February 2021 Belarus imported 4,327 tons on paraxylene and 3,002 tons of orthoxylene against 1,920 tons and 2,218 tons respectively in 2019.  Average prices of paraxylene imports dropped from $774 to $608 per ton in the first two months and orthoxylene fell from $779 to $660.

Exports of benzene from Belarus increased to 7,441 tons in January to February 2021 against 959 tons in the same period in 2020, with prices rising from $629 per ton to $687 per ton.  Shipments to Russia were not made in the early part of last year but amounted to 6,170 tons in January-February 2021 followed 1,271 tons sent to the Netherlands.   

Belarussian PTA imports Jan-Feb 2021

Belarussian PTA Imports (kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Russia

0.3

0.0

South Korea

6.0

3.0

Portugal

2.5

0.0

Poland

2.1

8.4

Total

10.9

11.4

PTA imports into Belarus amounted to 10.849 tons in the first two months in 2021 against 11,341 tons in the same period in 2020.  Average prices per ton dropped from $739 to $625. 

South Korea supplied 5,977 tons of PTA into Belarus in January to February 2021 versus 3,000 tons in the same period last year, with prices dropping from $738 to $623.  Poland reduced exports of PTA to Belarus from 8,341 tons in the first two months last year to 2,045 tons, with average prices per ton falling from $738 to $652.

Belarussian organic chemical trade, Jan-Feb 2021

Acrylonitrile export volumes from Belarus rose in the first two months to 7,295 from 4,193 tons in the same period in 2020.  Average prices rose from $1152 per ton to $1528 per ton.  The Netherlands was the main destination for Belarussian acrylonitrile, taking 4,682 tons in January to February 2021 at $1469 per ton.    

Belarussian Acrylonitrile Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

Russia

0.5

0.5

Hungary

1.1

0.0

Netherlands

4.7

0.0

Turkey

1.0

2.5

UAE

0.0

1.2

Total

7.3

4.2

Belarussian Methanol Market (unit-kilo tons)

 

Jan-Feb 21

Jan-Feb 20

Production

16.4

14.5

Exports

5.8

6.9

Imports

21.0

14.9

Balance

31.6

22.5

Methanol exports from Belarus dropped from 6,884 tons in the first two months in 2020 to 5,843 tons in 2021.  Exports prices rose from $223 to $376 per ton in the first two months with the largest exports being sent to Lithuania.  

Imports of methanol increased to 21,204 tons for an average price of $309 per ton against 14,855 tons in the first two months in 2020 for $107 per ton.  Russia is almost the only supplier of methanol to the Belarussian market.  Azot at Grodno has scheduled a maintenance shutdown for the 80,000 tpa methanol plant from 7 May to 5 June. 

Acetone imports into Belarus amounted to 2,333 tons in January to February 2021 against 1,952 tons in the same period in 2020, with average prices rising from $421 per ton to $774 per ton.  Russia was the main supplier. 

Naftan at Novopolotsk has announced another tender for the purchase of 8,000 tons for delivery in batches from 1 June 2021 to 31 January 2022. Applications for participation in the tender are accepted until April 27.  This follows a tender In December by Naftan for the purchase of 10,000 tons of acetone intended for the period April 2021 to January 2022. 

Belarussian polymer trade, Jan-Feb 2021

Belarussian Polymer Imports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

PVC

13.8

11.2

Polypropylene

17.3

8.2

LDPE

3.5

5.5

HDPE

7.2

9.6

Polystyrene

9.6

9.6

HDPE imports into Belarus amounted to 7,207 tons in the first two months in 2021 against 9,877 tons in the same period in 2020.  Prices per ton rose from $1060 in the first two months in 2020 to $1115, with Russia acting as the major supplier.

Belarussian Polymer Exports (unit-kilo tons)

Product

Jan-Feb 21

Jan-Feb 20

PET

11.4

11.3

LDPE

19.8

9.5

HDPE

0.5

1.6

Polycarbonate

0.0

0.8

Polyamide

6.4

6.6

LDPE imports into Belarus dropped to 3,487 tons versus 5,737 tons in the first two months last year.  Russia is the main supplier of LDPE to the Belarussian market.  Overall, imports of polyethylene into Belarus totalled 19,236 tons in the first two months in 2021 to 14.721 tons in the same period in 2020.

Polyethylene exports from Belarus rose to 21,831 tons in the first two months in 2021 against 13,663 tons in the same period in 2020.  Prices rose from $974 per ton to $1281 per ton. 

Belarussian MDI imports, Jan-Feb 2021

Belarussian MDI Imports (unit-kilo tons)

Country

Jan-Feb 21

Jan-Feb 20

Russia

0.1

0.0

Belgium

0.1

0.0

Hungary

1.2

0.1

Germany

1.4

0.8

Saudi Arabia

0.4

0.4

Others

0.0

0.0

Total

4.4

2.2

Import deliveries of MDI into Belarus in the first two months amounted to 4,402 tons against 2,225 tons in the same period in 2020.  Germany was the largest supplier, increasing shipments from 1,446 tons at $1310 per ton up to 2,105 tons at a higher price of $2324 per ton. 

KazMunaiGaz-Tatneft agreement on synthetic rubber project

KazMunayGaz and Tatneft signed agreements on 5 April for work on a butadiene rubber project.  This project includes 186,000 tpa of butadiene rubbers and 170,000 tpa of isobutane.  The raw material for the plant has been identified as butane produced by Tengizchevroil.  Finished products will be supplied to a tyre plant in the Karaganda region, as well producing enough surplus for exports.  The butadiene rubber project is to be located in the Atyrau region and is expected to start by 2025.

 

Grace licenses PP technology to Jizzah Petroleum in Uzbekistan

W R. Grace & Co has licensed its UNIPOL PP Process Technology to the new MTO Gas Chemical Complex located in the Bukhara region of Uzbekistan. The license has been granted to Enter Engineering which is responsible for constructing the MTO project. The UNIPOL PP Technology facility is expected to be launched by-2025 and will include one reactor line with the capacity to produce 257,000 tpa of polypropylene.  Enter Engineering will act as a licensee on behalf of Jizzakh Petroleum LLC which will own and operate the Gas Chemical Complex.

The actual date of the construction process for the MTO plant will depend on completion of the feasibility study.    Foster Wheeler Italiana has already developed a preliminary feasibility study for the project.  

 

Shurtan Gas Chemical Complex-pipeline to GTL project

Uzbekistan's first gas-to-liquids (GTL) project has reached 95.3% completion, with its commissioning and launch ceremony now scheduled to take place in the second half of 2021.   The $3.6 billion project will convert up to 3.6 billion m3/year of natural gas into 1.5 million tpa of kerosene, diesel, naphtha and LPG. The facility had been due to enter commissioning before the end of last year, but construction was delayed by the coronavirus pandemic.

Uzbek Polyolefin Plants and Projects

Company

Location

Product

Capacity (ktpa)

Start-up date

Jizzakh Petroleum

Bukhara region

LDPE/EVA

180

2026

Jizzakh Petroleum

Bukhara region

PP

257

2026

Shurtan Gas Processing

Kashkadarya/S

HDPE

125 rising to 450

2002/2024

Surhan Gas Processing

Surkhandarya

PE/PP

500 combined

2026

Uz-Kor Gas Chemical

Karakalpakstan

PE/PP

367/83

2016

When completed, the Uzbekistan GTL will bring Uzbekistan a step closer to achieving energy independence.  A gas pipeline linking the Shurtan gas chemical complex to the GTL plant has been completed and is fully operational, Uzbekistan GTL, a wholly owned subsidiary of state-owned Uzbekneftegaz.  Construction and installation, landscaping, laying asphalt, painting and insulation works are also nearing completion.  The plant's central control panel is also operational, and the facility's central laboratory is undergoing national and international accreditation.

Shurtan Gas Chemical Complex-expansion

Work is currently underway as part of expanding the production capacity of the Shurtan gas-chemical complex in the Kashkadarya Region.  The cost of the project is approximately $1.7 billion, including projects of 280,000 tpa of HDPE and 100,000 tpa of polypropylene.   A $300 million loan from Russia's Gazprombank was brought in to finance the project. 

To implement the project, a contract was signed with the Singapore-based company Inter Engineering for detailed design, equipment purchases and construction.  To date, ERS contractors involved 375 highly qualified specialists in the project.  An order has been made to produce 73 basic technological equipment out of 383 units.  As a result of this project, the production of polyethylene and polypropylene will be increased in Uzbekistan, which will create a basis to produce quality and export-oriented goods.



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