Czech crude imports Jan-Mar 2024

Russia supplied 909,200 tons to the Czech Republic in the first quarter in 2024 against 1.161 million tons in the same period in 2023.  Imports from Azerbaijan and Kazakhstan both increased in the first quarter, but Russia still accounted for nearly 50% of total crude imports. 

The main difference between 2023 and 2024 was that the price cap last year was much more effective, and the cost advantages of buying Russian crude this year have been minimal.  By the start of 2025 the Czech Republic will need by sanction requirements to purchase all crude from non-Russian sources.  Although the Czech Republic is striving to move away completely from Russian crude the second half of 2024 may be particularly difficult when the capacity of the TAL pipeline will be temporarily limited due to modifications.

Polish-Hungarian oil imports

From the total of 9.415 million tons of crude imported into Poland in the first quarter in 2024, supplies from Saudi Arabia totalled 4.565 million tons followed by Norway which provided 3.222 million tons.     

Orlen’s refineries in Poland, the Czech Republic and Lithuania operated at 94% in the first quarter, processing 2.535 million tons of crude oil.   Orlen has achieved consistently higher refining margins than MOL despite than the MOL Group despite receiving some Russian discount. 

Despite pressure to change oil supply MOL purchased nearly all of its imported crude from Russia in the first two months this year.   This trend is expected to change as the year progresses.  Under MOL’s deals, Janaf will transport 2.2 million tons of oil and will store 79,385 cubic metres of oil at the Omisalj terminal, on the island of Krk, as well as 70,000 cubic metres of crude oil at the Sisak terminal. 

MOL aims to be completely free of Russian crude by the start of 2026.  By the end of 2024 the group aims to have reduced crude purchases from Russia to around 50% of total supply, although in the first two months Russia was almost the sole supplier to Hungary.  

Since 2022 MOL Group has tested eight different crude types to see how suitable they would be on the current refinery and what investments are required.  MOL estimates that it needs to spend around $500 million for full diversification.   

The Slovnaft refinery has not yet managed to fully prepare for a permanent transition to non-Russian oil.  MOL has already started transporting crude oil from its oil field in Azerbaijan to Slovnaft in Bratislava via the Adria oil pipeline, but still require Russian supplies.

Polish petrochemical production Jan-Mar 2024

Ethylene production in Poland dropped from 91,800 tons in January to March 2023 to 90,100 tons in the same period in 2024, whilst propylene rise from 87,400 tons to 91,900 tons. 

Butadiene production at Plock dropped to 14,600 tons from 15,900 tons.  In the plastics sector polyethylene production rose to 80,400 tons in January to March 2024 versus 77,300 tons in 2023.  Polypropylene production at Plock increased from 72,500 tons to 82,700 tons.  PVC production fell from 59,500 tons to 45,200 tons with the plant at Wloclawek idle restarting in February after a four-month shutdown.

Orlen Group Jan-Mar 2024

Orlen's first-quarter net profit dropped by 70% to zl 2.77 billion (€650.704.82 million) due to the impact of a windfall tax and a weaker refining performance.  Orlen's payment of a windfall tax used to stabilise gas prices rose by 4.2 billion zloty to 7.7 billion in the first quarter.  First-quarter operating profit in the refining business dropped by 52% to zl1.9 billion, due to weaker margins and volumes.  Refining volumes were stable, Orlen’s division in Poland processing 5.595 million tons in the first quarter, Orlen Unipetrol processed 1.836 million tons and in Lithuania Orlen processed 2.035 million tons. 

For the petrochemical sector the main plus in the first quarter results came from an increase in physical sales to 1.218 million tons.  This was the highest amount since the second quarter in 2022 and a rebound from the 977,000 tons sold in the fourth quarter last year.  Several product areas, particularly plastics and PTA saw increased activity.

Despite the rise in volume sales, revenues from petrochemicals dropped from €1.271 billion in the first quarter last year to €1.131 billion.   Although operating costs dropped from €1.365 billion to €1.131 billion, the loss from petrochemical sales dropped from €46.0 million to €189.1 million.  This was the largest operating loss recorded in the last six quarters, with only the fourth quarter in 2022 recording a small positive value. 

Margins for petrochemicals in the first quarter were largely in line with recent quarterly figures, with ethylene recording €433 per ton and propylene €392 per ton. 

Butadiene margins amounted to €399 per ton in the first quarter this year, after peaking at €614 in the third quarter in 2022.  Since then, the range has been between €348 and €530 per ton.  In the aromatics sector benzene and paraxylene margins were stable in the first quarter, whilst toluene margins continued good performance at €616 per ton.  Paraxylene margins recorded €454 per ton against €312 per ton in the first quarter last year and €115 per ton in Q4 2022.   

Orlen Group utilisation rates

The olefins complex at Plock recorded a utilisation rate of 60% in the first quarter against 37% in the fourth quarter last year and 67% in the first quarter.  Lower utilisation was seen in the first quarter due to a deficit in feedstock (CDU VI and Hydrocracking shutdowns at the Refinery).  Basell Orlen Polyolefins at Plock recorded the same utilisation rates as in the first quarter last year but much higher than in the fourth.

Continued slow demand has also meant that the Metathesis plant at Plock has not operated anywhere near full capacity in the past year.  This impacted on propylene production for the Orlen Group which rose only slightly from 87,000 tons in the first quarter in 2023 to 91,200 tons in the same period in 2024.  Other Orlen Group plants in Poland reported lower utilisation rates in the first quarter due predominantly to demand side factors, including the PVC plant and PTA plant at Wloclawek.  Outside of Poland, Orlen Unipetrol achieved improved utilisation rates at the Litvinov olefins complex after recovering from 49% in the second quarter last year.  In Lithuania Orlen Lietuva’s PPF splitter was lower in the first quarter due to maintenance downtime.    

Czech olefin monomer trade, Jan-Mar 2024

Czech imports of ethylene amounted to only 222 tons in January to March 2024, down from 9,058 tons in January to March 2023.  This was to meet demand at Litvinov.  Ethylene exports from the Czech Republic amounted to 3,135 tons in against 3,306 tons in the first quarter in 2023.

Propylene imports into the Czech Republic dropped from 13,741 tons in January to March 2023 to 8,516 tons in 2024, with Germany supplying nearly all the product.   Average prices for propylene imports in the first quarter in 2024 dropped to €888.0 per ton against €960.1 per ton in the same quarter in 2023.  Exports of propylene at the same increased to 3,054 tons, up from an insignificant amount in the first quarter in 2023. 

Czech imports of butadiene dropped in the first quarter in 2023 from 24,759 tons to 12,906 tons in January to March 2024, all of which was supplied by Germany and Hungary.  Butadiene prices dropped from €1178 per ton to €831.9 per ton.  Nearly all the butadiene went to Kralupy for conversion into synthetic rubber.   

Czech imports of ethylene amounted to 27,911 tons in 2023, up from 16,034 tons in 2022.  Ethylene exports from the Czech Republic amounted to 9,386 tons versus 10,298 tons.  Propylene imports into the Czech Republic rose from 29,512 tons in 2022 to 33,210 tons in 2023, with main suppliers including Germany, Romania and Poland.  Average prices for propylene imports dropped in 2023 to €943.7 per ton against €1436.5 per ton. 

MOL’s petrochemical division Jan-Mar 2024

MOL’s petrochemical margins increased in the first quarter this year to €209 per ton against €149 per ton in the same quarter in 2023 and€132 per ton in the fourth quarter.  MOL’s petrochemical sales for olefins and butadiene continue to be lower than levels pre-COVID.  External olefin sales for MOL comprise ethylene shipments to BorsodChem for PVC production and internal group sales involve propylene to Slovnaft for polypropylene production. 

MOL’s ethylene production in Hungary and Slovakia rose to 141,000 tons in the first quarter in 2024 against 178,000 tons in the same period in 2023.  Propylene production dropped from 95,000 tons to 73,000 tons, whilst butadiene decreased from 21,000 tons to 20,000 tons.   Despite the small drop in butadiene production, raffinate production increased from 30,000 tons to 48,000 tons.

MOL Group's most significant commitments in Hungary relate to a polyol project of MOL Petrochemicals (€105.8 million), which aims to become a major producer of polyether polyols.  The plant was officially opened in May 2024.  Another €106.9 million is being invested in the construction of the metathesis project, which is a greenfield investment providing propylene for the polyol complex.  For the expansion of the maleic anhydride plant at the Danube refinery, which is located at Szazhalombatta, €30.7 million has been allocated.  Other projects being undertaken by MOL in Hungary include a revamp of the PP3 unit and modernisation of the ethylene.  In Croatia the Rijeka refinery, belonging to MOL subsidiary INA is undergoing an upgrade project.

HIP Petrohemija Q1 2024

HIP Petrohemija at the Pancevo petrochemical complex produced 80,200 tons of petrochemicals in the first quarter. The refining of virgin naphtha in the first quarter amounted to 99,800 tons, while the petrochemical product sales in the first quarter of 2024 amounted to 60,900 tons.  HIP Petrohemija recorded a slight loss in both EBITDA and net profit in the first quarter.  The decline in operational indicators is largely due to the undertaking of the capital overhaul within Petrohemija. 

The strategy of further development of HIP Petrohemija will be based on the modernisation of basic production capacities and the construction of new facilities, then on increasing energy efficiency and business efficiency, as well as on the implementation of projects in the field of environmental protection. Key investment activities have been carried out in the ethylene and polyethylene plants.  The aim is to increase the reliability of the plant, as well as increase operational and energy efficiency. In addition to investment activities, the overhaul of process equipment in other plants has been carried out.

Polish propylene & butadiene imports, Jan-Mar 2024

Propylene producers in Europe are maintaining low operating rates, with production levels operating significantly below average.  Due to a lack of a clear picture on demand, spot purchases for Grupa Azoty this year have become more prevalent.  Some market players believe that structural demand improvements can be expected in the second half of 2024, if interest rates are relaxed and a revival occurs in certain market sectors.

Propylene supply to Grupa Azoty Kedzierzyn is secured under contracts with suppliers, which are supplemented by spot purchases as needed.   Propylene is bought mainly by Grupa Azoty Kedzierzyn’s Oxoplast Segment, Grupa Azoty Kedzierzyn focuses on expanding the portfolio based on a new product platform diversifying from the currently used aldehydes towards oxo alcohols.  The segment’s major strategic objective is to reduce exposure to the market downturn risks by enhancing flexibility of production and balancing production volumes of aldehyde derivatives. There are also business development plans to enter the bio-plasticizers market.

The decline in prices has been driven in part by lower average prices of crude oil as well as the demand and supply dynamics.  Polypropylene demand has proved relatively stable but other derivative areas such as oxo alcohols and propylene oxide for the polyol industry continue to experience lower consumption than normal.  European crackers and refineries operated at their minimum technical loads in the early part of the third quarter, which helped to minimise the oversupply of propylene.   

Poland imported 28,613 tons of propylene in January to March against 25,435 tons in January to March 2023.  Average prices dropped from €972.5 per ton in January to March last year to €829.3 this year.  Butadiene import prices for Poland dropped from €916.3 per ton in January to March 2023 to €721.2 in January to March this year, with volumes rising from 17,846 tons to 24,263 tons. 

Hungarian propylene exports Jan-Feb 2024

Exports of propylene from Hungary dropped in the first two months were focused almost exclusively on Slovakia and amounted to 22,063 tons.  In the first two months in 2023 exports to Slovakia totalled 19,011 tons.  Export prices from Hungary dropped from €1186.20 per ton to €1040.2 per ton.  Propylene exported from Tiszaujvaros to Slovnaft at Bratislava is consumed solely in the production of propylene polymers.

Hungarian butadiene exports amounted to 12,209 tons in the first two months in 2024 against 10,124 tons in the same period in 2022.  Shipments into Poland totalled 6,189 tons in January to February 2024 against 4,055 tons in the same period in 2023.  Exports to Germany increased from 1,995 tons to 3,959 tons and to the Czech Republic dropped from 4,075 tons to 2,062 tons.  Average prices for Hungarian butadiene exports fell to €726.6 per ton versus €869.4 in 2023.

Polish styrene imports Jan-Mar 2024

Synthos in Poland imported 25,805 tons of styrene in January to March against 19,220 tons in January to March last year.  The Netherlands provided 11,227 tons in the first three months in 2024 versus 8,583 tons in the same period in 2023.  The Czech Republic has also been an important supplier this year, shipping from Kralupy to Oswiecim.  Styrene import costs into Poland increased from €1198.6 per ton last year to €1349.6 in the first quarter this year.

Central European polyolefins production Jan-Mar 2024

Production of polyethylene in Poland increased from 77,300 tons in the first quarter last year to 80,400 tons in the same period in 2024.  Polypropylene production increased from 72,500 tons in the first quarter in 2023 to 82,700 tons in January to March 2024.  Currently polypropylene production in Poland takes place at Plock, but production is currently being started up at the new Polimery Police plant in the north of the country.  This plant was expected to start in August or September last year, but problems with the equipment during the start-up phase caused a delay.  

The MOL Group reduced polyethylene production at its two plants located in Hungary and Slovakia from 143,000 tons in the first quarter in 2023 to 119,000 tons in 2024.  HDPE production at Tiszaujvaros dropped from 86,000 tons to 74,000 tons.  Polyolefin sales from the MOL Group amounted to a total of 211,000 tons in the first quarter against 265,000 tons in the same quarter in 2023.

Czech polyethylene production and trade Jan-Mar 2024

Production of polyethylene at Litvinov amounted to around 65,000 tons in the period January to March 2024 against 79,000 tons in the same period in 2023.  Polypropylene showed a slight increase in the first quarter totalling around 120,000 tons against 117,000 tons last year.

Overall, for 2023 Czech polyethylene consumption fell to 235,604 tons against 269,901 tons in 2022. 

Orlen Unipetrol is attaching greater focus on the principles of circular economy and permanent sustainability.  The aim is to It develop these principles by building a broad portfolio of recycling activities, thanks to which it will be able to efficiently acquire and process waste plastic and bio-waste and produce new petrochemicals and biofuels.

Polish polyolefin production Jan-Mar 2024

After slight increases in polyolefin production at Plock in the first quarter Orlen’s group's sales of polyethylene and polypropylene rose 13% over the first quarter in 2023 to 179,000 tons.  Partly this was due to acquisition of full control over the installation and production of LDPE at Plock.  However, it also reflected some stability in the market indicating better prospects for 2024.  Even sales of PVC increased slightly in the first quarter after production was restarted.

The Orlen Group is already the largest producer of plastics in the region, and its position will be strengthened due to a significant increase in production capacity as part of the Olefiny III investment. 

However, the project has become much more expensive than originally estimated, and its completion has already been postponed several times. Currently, it is valued at approximately zl 25 billion, and the date of commissioning is set for the first half of 2027. Orlen is also working on a concept for the expansion of its polyethylene unit at Plock. 

Czech polyethylene trade Jan-Mar 2024

Consumption of polyethylene in the Czech Republic has mirrored other markets in Europe in the past two years, with quarterly volumes falling sharply in 2023.  Overall, for 2023 Czech polyethylene consumption fell to 186,200 tons against 214,300 tons in 2022. 

Czech prices for both exports and imports of polyolefins were lower in 2023 against 2022.  Polyethylene exports amounted to 97,044 tons in the first quarter in 2024 against 95,697 tons in 2023. 

HDPE export shipments comprised 81,701 tons in the first three months in 2024 against 84,744 tons in the same period in 2023.  Germany was the largest destination for Czech HDPE supplied from Litvinov.   Other important markets for Czech polyethylene exports include Poland, Italy and Belgium. 

For imports of all forms of polyethylene, Czech inward shipments amounted to 77,020 tons in January to March 2024 against 73,255 tons in 2023, with prices dropping from €1729.5 per ton to €1481.9 per ton.  Germany was the largest source of polyethylene imports.

Polish polyethylene trade Jan-Mar 2024

Polish trade in polyethylene increased in the first quarter for both imports and exports.  The increase in demand has been relatively modest but provides some suggestion that the market may have turned the corner.

Poland carries a large deficit in polyethylene supply, which is part of the reason behind Orlen’s Olefiny III project at Plock now under construction.

Polish imports of polyethylene totalled 334,407 tons in January to March this year against 297,491 tons in January to March 2023, with average prices falling from €1492.8 per ton to €1267.1 per ton.  

HDPE is the largest category of imported polyethylene into Poland, amounting to 104,139 tons in January to March versus 104,504 tons in January to March 2023.  Germany was the largest supplier of HDPE to the Polish market this year.   

LLDPE imports increased from 51,459 tons in January to March 2023 to 52,413 tons in the corresponding period in 2024.  Most of the LLDPE imports were sourced mostly from West Europe, including France, the Netherlands and Germany. 

Polish polyethylene exports amounted to 74,276 tons in the first three months in 2024 against 72,890 tons in the first three months in 2023.  Average prices for polyethylene exports from Poland increased to €1342.5 per ton against an average of €1195.4 per ton in the period January to March last year.  In the first three months this year exports of HDPE from Poland amounted to 47,620 tons versus 49,758 tons in January to March 2023.  LDPE exports dropped from 12,009 tons to 11,179 tons.

Hungarian polyethylene trade Jan-Mar 2024

Hungarian polyethylene exports were slightly lower in the first two months in 2024, amounting to 52,111 tons against 59,047 tons in the same period in 2023.  Revenues fell from €78.076 million to €61.898 million in 2024, translating into average prices dropping from €1322.3 per ton in 2022 to €1187.8 per ton. 

HDPE shipments from Hungary amounted to 36,348 tons in January to March 2024 versus 39,106 tons in the same two months in 2023, whilst exports of LDPE dropped from 17,226 tons to 11,801 tons. 

Hungary remains a net exporter of LDPE and HDPE and still a net importer of LLDPE and ethylene copolymers.  In the first two months this year imports of all grades of polyethylene into Hungary amounted to 33,478 tons against 28,613 tons in the same period in 2023.  Import costs for polyethylene fell to €51.945 million against €54.760 million in the same period last year. 

Hungarian import prices for polyethylene decreased on average from €1913.8 in January to February 2023 to €1551.6 in the first two months in 2024 with gradual price declines since the start of last year. 

Polish PP Trade Jan-Mar 2024

Polish polypropylene imports, including homo grade and copolymers, rose in January to March 2024 to a total of 234,348 tons versus 225,266 tons in January to March 2023.  Average prices per ton decreased from €1542.5 to €1332.1 per ton.  Homo grade polypropylene imports specifically dropped from 149,320 tons in the first quarter in 2024 to 147,584 tons in the same period in 2023, whilst copolymer imports increased from 72,624 tons to 79,601 tons. 

Regarding export activity from Poland, shipments increased from 62,927 tons against 79,347 tons in January to March 2024.  Homo polymer grades comprised the main category of Polish polypropylene exports, where Germany was the largest destination followed by the Czech Republic.

Polimery Police production start-up

Polypropylene produced as part of the newly built installations at the Polimery Police plant has been successfully tested through the various stages and is now available for direct sale and distribution. This was made known by Grupa Azoty Polyolefins from 15 May at the PDH and PP (polypropylene) units, as well as at AUX (auxiliary units) and HST (offshore gas terminal).  The company's target portfolio includes over 30 types of propylene polymers under the Gryfilen brand. The introduction of new types of products is being carried out gradually and according to the planned schedule. 

The Maritime Gas Terminal in Police regularly accepts deliveries of propane and ethylene.  The Company received its ninth vessel with a propane cargo by early May.  Grupa Azoty Polyolefins is a special purpose vehicle established to implement the Polimery Police project. Its main shareholders are Zaklady Chemiczne Police (34.4%) and Grupa Azoty (30.5%).  Grupa Azoty Polyolefins has progressed with the start-up of the Polimery Police and had achieved the level by 15 May that all of the start-up and tests of guaranteed parameters.

Czech polypropylene production and trade Jan-Mar 2024

Overall, for Central Europe polypropylene production amounted to 188,700 tons in the first quarter in 2024 against 200,500 tons in the same period in 2023.  Hungary reduced production of polypropylene from the first three months in 2023 from 128,000 tons to 106,000 tons in January to March 2024. 

Production of polypropylene at Litvinov amounted to 154,000 tons in the period January to March 2024 against 195,000 tons in the same period last year.  Consumption of polypropylene in the Czech Republic has performed more steadily than polyethylene although quarterly volumes have been slightly down in 2023.  Overall, for the first quarter in 2024 Czech polypropylene consumption fell to 329,800 tons against 338,000 tons in the same period in 2023. 

Exports of all forms of polypropylene from the Czech Republic amounted to 74,024 tons in January to March versus 78,881 tons in January to March 2023, with average prices dropping from €1542.8 per ton to €1438.0 per ton.  Homo-grade PP provides the main category of Czech polypropylene exports, amounting to 64,441 tons in January to March last year versus 60,276 tons in 2023.   

For imports of all forms of polypropylene, Czech inward shipments increased from 128,869 tons in January to March 2023 to 129,855 tons in January to March 2024, with average prices dropping from €1687.7 per ton to €1538.4 per ton. 

Rompetrol Rafinare-polyolefin production and sales Jan-Mar 2024

Rompetrol Rafinare processed 23,000 tons of propylene in the first quarter this year for the production of polypropylene against 32,000 tons in the same period in 2023.   The LDPE plant remained idle at the Constanta site due to unfavourable market conditions.   The polypropylene (PP) plant operates with raw material produced and delivered internally by the Petromidia refinery, and the low-density polyethylene (LDPE) plant uses imported ethylene as a raw material.  The petrochemical segment is the only producer of polypropylene and polyethylene in Romania.

Hungarian polypropylene trade Jan-Feb 2024

MOL shipped 41,215 tons of homo grade polypropylene (valued at €52.985 million) in January to February 2024 which was down from 41,334 tons in the same period in 2023 (€57.250 million in value), whilst copolymer exports dropped from 16,075 tons (€23.361 million in value) to 12,782 tons (€17.486 million).    Average prices dropping from €1385.1 per ton to €1285.6 per ton.

Polypropylene imports into Hungary amounted to 36,038 tons in the first two months in 2024 versus 32,342 tons in the same period in 2023, with costs in January-February 2024 amounting to €316.205.520 million from €351.877 million in 2022.   Overall average prices dropped from €1779.5 per ton to €1717.0 per ton this year, whilst copolymer prices dropped from €1845.9 to €1624.1 per ton.  By category homo grade imports into Hungary comprised 23,547 tons in January to February 2024 against 19,172 tons whilst copolymers fell to 8,619 tons against 9,434 tons.

Czech synthetic rubber trade Jan-Mar 2024

Czech exports of synthetic rubber amounted to 34,020 tons in January to March this year versus 42,251 tons in the same three months in 2023.  Imports increased from 32,640 tons to 36,337 tons in January to March 2024.   Natural rubber imports into the Czech Republic dropped slightly from 21,679 tons to 20,480 tons.    

Czech butadiene rubber trade Q1 2024

The Czech Republic exported a total of 28,898 tons of butadiene rubber in the first quarter this year against 28,031 tons in the same period in 2023. 

Average prices for butadiene rubber fell from €1889.8 per ton to €1594.3 per ton.  Czech exports of butadiene rubber to India amounted to 3,786 tons in January to March 2024 against 3,761 tons in the same period in 2023.  Other important markets included Poland where exports amounted to 3,467 tons in the first quarter this year against 3,045 tons in the same period in 2023, and Slovakia where shipments amounted to 2,555 tons.

Besides exports the Czech Republic also imported 7,353 tons of butadiene rubber in the first quarter in 2024 versus 6,425 tons in the same period in 2023.  The two largest suppliers to the Czech market in the first quarter were Germany and the US, accounting for around 80% of total imports. 

Hungarian synthetic rubber imports Jan-Feb 2024

Hungarian imports of synthetic rubber amounted to 17,707 tons in the first two months versus 14,146 tons in January to February 2023, whilst import costs rose from €35.327 million to €42.291 million.  Average prices rose slightly from €2223.4 per ton to €2887.5 in 2023.

Butadiene rubber imports dropped from 7,426 tons to 5,016 tons, with costs dropping from €16.653 million to €7.695 million.  Imports of halogenated butyl rubber dropped from 1,275 tons to 749 tons and SBR imports rose from 3,182 tons to 9,271 tons.  

Polish rubber prices Jan-Mar 2024

Rubber import prices into Poland for both synthetic and natural have seen gradual declines from January to March this year as a combination of economic factors have taken effect.  Overall, synthetic rubber import prices dropped from €2210.0 in the first three months in 2023 to €1763.8 in 2024.

Polish rubber trade Jan-Mar 2024

Poland imported 80,700 tons of synthetic rubber in January to March this year against 64,773 tons in January to March 2023.  By category butadiene rubber was the largest, accounting for 24,120 tons in the first three months in 2024 against 15,408 tons in 2023.

Synthetic rubber exports from Poland amounted to 89,711 tons in the first three months against 71,114 tons in January to March 2023.   India was the largest destination for Polish exports, accounting for 12,119 tons in the first quarter which consisted mostly of SBR grades.

Exports of butadiene rubber from Poland amounted to 19,012 tons in January to March versus 12,632 tons last year.   Major destinations for Polish butadiene exports were led by Belgium which took 2,833 tons for €4,016 million. 

Polish synthetic rubber production and domestic market Jan-Mar 2024

Synthetic rubber production at Oswiecim for Synthos amounted to 68,300 tons in January to March 2043 from 59,300 tons in the same period in 2023.  Production increased this year although the market remains under pressure. 

In each of the first three months in 2024 production of rubber products, based on both synthetic and natural rubber. was lower than in the same month last year.   Overall production in the first quarter this year dropped to 243,679 tons against 275,455 tons.

The largest segment of rubber products, tyre production, dropped in the first quarter and amounted to 115,522 tons against 137,975 tons in the same period last year.  All areas of tyre production showed lower volumes in the first quarter. 

At the end of this year, Michelin Polska intends to liquidate its truck tyre production plant Olsztyn, but it will not lay off the people working at the plant.  This business of the company will be transferred to Romania due to high costs in Poland.  The closure of the plant is also linked to the changing market for truck tyres, which is flooded with cheap tires mainly from China.   Other branches of tyre production Olsztyn will remain operational. 

Lower consumption of rubber this year continues the trend from 2023.  Sales of synthetic rubber by Synthos dropped by 61,000 tons in 2023 over 2022, although this was partly affected by the closure of the Kralupy EBSR plant.  The line is now closed with all shutdown costs booked.

Increased export activity has helped Synthos to increase its production of synthetic rubber this year mainly due to higher sales to Asia.

Polish benzene exports Jan-Mar 2024

Polish exports of benzene totalled 41,968 tons in January to March against 37,010 tons in the same period last year.  Despite similar volumes, average prices dropped to €857.8 per ton from €1178.8 per ton last year.  Germany was the largest recipient of Polish benzene exports, followed by the Czech Republic.

Benzene exports from Poland were lower in the first quarter in 2023 due to the problems for Petrochemia Blachownia in receiving coal based raw materials from Ukraine.  Petrochemia Blachownia is part of the Czech Agrofert group.

Polish-Czech aromatic imports Jan-Mar 2024

Phenol imports into Poland amounted to 24,190 tons in January to March 2024 which was up from 20,932 tons in the same period in 2023.  Consumption of phenol in the Polish market increased in the first quarter this year to 34,273 tons from 32,328 tons in the same period in 2023.

Phthalic anhydride imports into Poland increased from 24,427 tons in January to March 2023 to 23,314 tons in the same period in 2023.    In other product areas, styrene imports amounted to 17,793 tons in the period January to March 2024 versus 19,587 tons in the same period in 2023 whilst ethylbenzene imports declined from 31,095 tons to 27,373 tons.  Nearly all of the ethylbenzene imports come from the Czech Republic. 

All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group.  Czech styrene exports increased from Kralupy in the first quarter, rising to 6,193 tons from 5,050 tons in 2023 whilst imports dropped from 5,924 tons to 1,769 tons.

Czech benzene imports rose to 14,320 tons in the first quarter in 2024 against 10,931 tons in the same period in 2023, whilst toluene imports dropped to 2,198 tons from 2,869 tons.  Imports of bisphenol A dropped from 29,069 tons to 26,864 tons. 

There are two producers of benzene in the Czech Republic including Unipetrol at Litvinov and Deza at Valasske Mezirici.  Deza is owned by Agrofert and intends to increase the production capacity of benzene to 160,000 tpa in addition to toluene to 25,000 tpa. 

Bisphenol A imports into Central Europe

Bisphenol A imports into the Czech Republic totalled 8,324 tons in the first quarter in 2024 against 7,570 tons last year, with average prices dropping from €1537.6 per ton to €1374.8 per ton. 

The largest user of bisphenol A in the Czech Republic is Spolchemie at Ust nad Labem, where epoxy resins are produced.   The largest supplier to the Czech market is South Korea which increased shipments to 5,184 tons from 2,879 tons in the same period in 2023.  For the whole of last year South Korea which supplied 13,824 tons to the Czech Republic which was up from 11,072 tons in 2022.  

Poland also increased shipments from South Korea last year rising from 6,909 tons to 11,445 tons whilst the largest European recipient of Korean BPA was Germany, rising to 52,157 tons against 15,514 tons in 2023.  Poland reduced imports from South Korea in the first quarter 6,822 tons last year to 3,472 tons. 

Spolchemie’s capacity for epoxy resin production amounts to 100,000 tpa making it one of the largest producers in Europe.  The company is one of the oldest chemical companies in the Czech Republic. 

In Poland production takes place at Lerg (formerly Ciech Zywice) which is the sixth largest producer in Europe at 30,000 tpa.  Aside domestic production the most serious competitors in Poland include resin suppliers from Germany, the Czech Republic and Italy.

Czech exports of epoxy resins amounted to 13,082 tons in the first quarter in 2024 against 13,874 tons in the same period in 2023.  Whilst volumes were similar prices fell from €3,541.8 per ton to €2494.0 per ton.  The price reduction over the past twelve months has been driven by the decline in raw material prices combined with downward pressure from market conditions.  Germany remains the largest market for Czech epoxides, accounting for 4,134 tons in the first quarter in 2024 against 6,108 tons in the same period in 2023.

Hungarian aromatic imports Jan-Feb 2024

Hungarian benzene exports in the first two months in 2024 dropped to 4,411 tons against 21,084 tons in the same period last year due to lower production.   Revenues from benzene exports dropped to €4.148 million against €16.525 million.  Exports are distributed largely to Germany, Belgium and the Czech Republic.  

Toluene imports into Hungary amounted to 9,414 tons in the first two months for €9.024 million in value.  This compares against 3,005 tons in the same period last year at costs of €2.782 million.  Imports increased this year in line with the increase in TDI production at BorsodChem.  Germany was the largest supplier of toluene providing 4,290 tons to the Hungarian market in the first two months in 2024 followed by Slovakia with 3,074 tons.  Other suppliers included Belgium and Romania.

Central European caprolactam market Jan-Mar 2024

Poland increased production of caprolactam slightly to 25,000 tons in the first quarter this year versus 24,000 tons in the same period in 2023.   Over the course of 2023 the European caprolactam and PA6 markets were affected by reduced consumer demand.  The key sectors consuming PA6 operated at significantly reduced rates throughout 2023 due to weak demand from end customers and macroeconomic headwinds.  

As caprolactam and PA6 exports declined significantly, imports of polymer and PA6 derivative products from regions offering competitive prices (mainly Asia) increased.  It became a vicious circle for Grupa Azoty whereby, demand for local PA6 and CPL dropped even lower, especially in the first half of the year.

Since the second half of 2022 caprolactam production by Grupa Azoty at its two plants at Tarnow and Pulawy has been affected higher energy costs, combined with continuous weak demand for polyamide.  The situation picked up in the automotive sector in the second half of 2024.  However, despite the revival the market volumes remained below the pre-pandemic levels.  Demand from other PA6 buyers, such as the packaging, textiles, and consumer goods sector, has been relatively stable. 

In the fourth quarter of 2023, the average quarterly contract price of European liquid caprolactam was down 27% and up 9% quarter on quarter. The average annual contract price of European caprolactam (DDP WE) fell 28% year on year. In the same period, the average price of European polyamide 6 (Engineering Resin Virgin DDP, WE) was 26% lower year on year and 9% higher quarter on quarter. The average annual European price of polyamide 6 (Engineering Resin Virgin DDP, WE) declined 26% year on year.

The Czech Republic exported 7,708 tons of caprolactam in the first three months this year down from 5,109 tons in the same period in 2023.  Average prices dropped from €1747.6 per ton to €1546.3 per ton with upward pressure felt at the end of the first quarter.  All of the exports were shipped to European countries.  Italy was the largest destination for Spolana’s exports, with shipments rising from 2,796 tons in the first three months last year to 3,468 tons.   

Polish PTA exports Jan-Mar 2024

Revenues from PTA sales for Orlen, whether export or domestic, amounted to €174.2 million in the first quarter against €80.3 million in the same period last year.  By volume sales rose from 107,000 tons in January to March 2023 to 146,000 tons in January to March 2024. 

Contract prices of PTA in the European market were on average 21% lower in 2023 than in 2022.  It was not until the end of the second quarter that demand for PET from the bottled beverages industry picked up along with rising temperatures across Europe.  However, demand from other sectors remained poor.

The German PTA market, a key player in the European chemical industry, has witnessed a significant downturn in prices during April 2024. This decline was attributed to lacklustre demand stemming from a downstream sector including PET bottles that utilize PTA for various applications. In the meantime, not only the low enthusiasm from the consumer end but also the low production costs for PTA have altogether declined with the trend.

Orlen’s PTA exports amounted to 83,977 tons in the first quarter against 53,280 tons in the same period in 2023.  Germany increased shipments from 45,836 tons to 71,792 tons.  Average prices dropped from €891.8 per ton in the first quarter last year to €770.6 per ton in the first quarter in 2024. 

PTA prices deteriorated by 4.5% throughout April 2024 amidst the muted demand from end-use industries, including beverage bottling.  This has resulted in a backlog of unsold inventory, causing bottlers to hold off on additional PTA purchases. While there was a glimmer of hope in early March when downstream PET producers like Alpek UK, Equipolymers, and Polisan restarted their production lines, this uptick wasn't enough to counter the overall downward trend.

Hungarian TDI-MDI exports Jan-Nov 2023

Isocyanate exports from Hungary have increased this year, rebounding from the declines in 2023.  Hungarian TDI exports rose in the first two months to 55,242 tons against 38,795 tons in January to February 2023.  Average prices dropped from €2581.6 per ton to €1917.9 in 2023.  Although TDI prices overall were higher in the first half last year, the price trend has been falling gradually which has been partially connected with lower feedstock costs.

Exports of TDI from Hungary to Belgium rose from 7,684 tons in the first two months in 2023 to 8,682 tons in January to February 2024, whilst volumes to Italy increased from 5,474 tons to 6,231 tons. 

Elsewhere in West Europe Hungarian exports to Portugal dropped from 2,740 tons to 1,596 tons, whilst shipments to Germany increased from 1,321 tons to 2,311 tons.  In Central Europe shipments to Poland fell from 28,620 tons to 25,627 tons and rose to Romania from 13,235 tons to 13,414 tons.

MDI exports from Hungary increased in the first two months last year to 40,199 tons from 49,259 tons in the same period in 2024.   MDI export prices dropped from €2495.6 per ton in January to February 2023 to €1774.4 per ton this year.

Poland was the largest destination for Hungarian MDI exports, shipping 7,905 tons in the first two months in 2024 versus 9,496 tons in the same period in 2023.  Romania is the second largest market in Central and South East Europe, taking 3,371 tons in the first two months this year which was down from 4,831 tons in 2023.

Central European isocyanate trade Jan-Mar 2024

MDI imports into the Czech Republic totalled 9,355 tons in January to March 2024 against 9,082 tons in the same period in 2023.  The leading supplier was Belgium which shipped 2,140 tons in the first quarter versus 2,394 tons in the same period in 2023. 

MDI imports into Poland totalled 39,369 tons in January to March 2024 against 34,921 tons in January to March last year.  Average prices dropped from €2358.1 per ton to €1859.4 in January to March 2024.  Germany increased shipments to 12,260 tons against 9,760 tons in January to March 2023, whilst imports from Hungary amounted to 10,903 tons against 9,973 tons.

TDI imports into Poland amounted to 20,366 tons in January to March against 17,015 tons in the same period in January to March 2023.  Prices this year averaged €2068.1 per ton in the first three months against €2050.1 per ton in 2023. 

The cost of toluene was one of the factors behind the rise in TDI prices in the first half of the year but then slowed down in the third quarter allowing TDI prices to move downwards.  Besides imports, Poland exported 2,276 tons of TDI in the first quarter in 2024, against 1,552 tons in the same period in 2023. 

MOL’s polyol complex officially opens in May

MOL ‘s Polyol Complex at Tiszaujvaros was officially opened in May 2024, after a two-year delay caused partly by the market effects from firstly COVID and secondly the war in Ukraine.    Thyssenkrupp has been the main contractor in the construction of the polyol Complex, which represents the largest organic investment of the MOL Group.  The new plant will help MOL Petrochemicals to expand its product range and influence in Central and East Europe.  When fully operational the polyol plant is expected to have a significant impact on the regional polyol market. 

POLYMOL is the registered trademark for polyether polyol produced by MOL Petrochemicals in Tiszaujvaros. POLYMOL products can be applied to various market segments including flexible slabstock foams, flexible moulded foams, rigid foam applications, coatings, adhesive, sealant, and elastomer applications.  

The €1.2 billion investment was started by MOL at the end of 2018 and was supported by the Hungarian government with €31 million in investment subsidies and €72 million in tax incentives.  The new complex will have a capacity of 205,000 tpa of polyols in addition to 60,000 tpa of propylene glycol.  Besides flexible and rigid foams, polyols are used in the production of unsaturated polyester resin (UPR), functional fluids, and personal care products.

MOL has been waiting for European markets to revive before starting production.   MOL's original goal was to complete the polyol plant worth $1.3 billion with a production capacity of 200,000 tpa by the second half of 2021, but due to Covid the plans had to be modified.  

Czech polyol imports Jan-Mar 2024

Czech polyol imports dropped in the first quarter to 12,097 tons against 21,607 tons in the same period in 2023, with average prices dropping from €2680.8 per ton last year to €2285.8 in 2024.  The leading supplier to the Czech market was Belgium which shipped 3,318 tons in the period January to March 2024 against 6,130 tons in the same period in 2023.  This was followed by Germany which exported 1,994 tons which was down from 4,614 tons. 

Polish polyol trade Jan-Mar 2024

Polish polyol imports amounted to 33,855 tons in the first three months in 2024 against 33,687 tons in the same period in 2023.  The major sources of imports came from Belgium, Germany and the Netherlands.  Polyol import prices dropped from €2230.6 per ton to €1896.4 per ton.  The largest source of imports in the first quarter came from the Netherlands in the first three months, amounting to 9,217 tons against 6,646 tons in the same period in 2023.

Exports of polyols from Poland in the first three months amounted to 14,521 tons against 14,992 tons in the same period in 2023.  Destinations for deliveries were focused mostly on Europe in 2023, led by Italy taking 2,280 tons.  Due to lower prices this year export revenues dropped from €34.956 million to €30.256 million. 

PCC Rokita Jan-Mar 2024

PCC Rokita recorded zl 16.350 million of consolidated net profit in the first quarter compared to zl 140.54 million profit in the first quarter in 2023.  The group’s operating profit amounted to zl 26.9 million (€6.3 million) compared to zl 182.370 (€42.7 million), whilst the EBITDA dropped to zl 77.94 million (€18.3 million) compared to zl 231.03 million (€54.1 million).

Consolidated sales revenues for PCC Rokita amounted to zl 491.92 million (€115.2 million) in Q1 2024 compared to zl 779.97 million (€182.6 million) in 2023.

Since the beginning of 2024, PCC Rokita has focused on projects that are associated with reducing the energy intensity of production.  This is to be helped by the installation of another two modern electrolysers on the chlor-alkali production unit.  

The company has also completed the start-up of a new unit for the production of sodium hypochlorite, which is expected to significantly increase the production and sales.  The construction of a new universal alkoxylate plant at Brzeg Dolny, in conjunction with PCC Exol, continues to make progress. 

The situation in all product areas was challenging for PCC Rokita in the first quarter this year.  Lower results were recorded predominantly by the chlorine derivatives segment, which contributed to the decline in the results of the entire group compared to the first quarter in 2023.  The segment's EBITDA decreased significantly by 84% compared to the same period of 2023.  It should be noted that the first quarter in 2023 was an exceptionally successful period for chloralkalis 

PCC Rokita’s overall margins fell from 33.3% in the first quarter in 2023 to 20.7% in the first period in 2024.  By product area the largest fall was recorded in the chlorine sector where the margin dropped from 33.4% to 12.62%. 

Polyurethane margins increased slightly from 6.1% in the first quarter last year to 9.0% this year, with the market showing some minor rebound.  Profitability in the European polyol sector last year attained the lowest levels in many years, despite some the improvement in the third quarter. 

Margins for PCC Rokita’s polyurethanes dropped from 13.4% in January to December 2022 to only 4.2% in for the whole in 2023, although the chlorine sector’s margins only dropped from 26.1% against 33.4%.  The current level of margins in the polyurethane sector is broadly considered as insufficient for long-term investment.   PCC Rokita believes that it probably has not lost any share in the polyurethane market segment and volume should recover in time.   Overall, the focus strategy of PCC Rokita on polyols for higher quality foams provides the basis for future performance.   

PCC Prodex-polyurethane systems

In addition to polyols the PCC Rokita Group manufactures polyurethane systems and prepolymers as part of the segment.  This includes its subsidiaries PCC Prodex and IRPC Polyol Co. Ltd.  In the first quarter of 2024, PCC Prodex maintained sales volumes similar to the corresponding period of 2023, but these volumes are lower than in the timeframe period 2021-2022.  PCC Prodex recorded declines in sales volume in 2023 compared to 2022. In the group of spray insulation for construction, where PCC Prodex is one of the leading suppliers for the domestic market. 

PCC Prodex increased its geographical sales range in 2023, which partially compensates for the decline in volumes in existing markets.  Lower revenues were driven partly by lower operating costs which involved reduced prices for the company’s main raw material ethylene oxide.  Market demand also contributed to lower prices, although some improvement was seen in the third quarter.  

Chimcomplex Jan-Mar 2024

Chimcomplex’s turnover totalled €84.136 million in the first quarter this year, down slightly from €85.904 million in the same period in 2023.   Chimcomplex recorded an operating profit of €4.209 million in the first quarter versus only €0.567 million in the same period last year whilst the net profit increased to €1.495 million against a loss of €1.659 million.    Overall, the financial performance was slightly better with costs dropping below revenues, i.e., in January-March 2024 costs were €79.205 million against revenues of €84.136 million.    

Chimcomplex focused its activity in the first quarter on polyols/polyethers and oxo-alcohols sectors, which are the most profitable product areas. Although the physical sales volume increased by 12%, the turnover remained relatively constant, with a slight decrease of about 3%.  This was due to the decrease in prices and market quotations for chlorakali products.

The decline in revenues in the chlorine sector meant that the share in total revenues dropped from 40% in the first quarter in 2023 to 19% this year.  At the same time revenues from polyol sales increased from 44% to 57%. 

In the medium and long term Chimcomplex intends to focus on increasing the production of polyols, as evidenced by the completion of the green polyol unit which will add another 17,000 tpa of capacity.   Medium term plans include projects to obtain methanol, ethylene oxide, and monoethylene glycol.  Some plans include modernising the existing idle PVC plant at Ramnicu Valcea, but the economics of this revamp may not be viable.  Regarding energy investments the construction of the cogeneration plant at Ramnicu Valcea now forms a major plank of its strategy with aims to reduce CO2 emissions.

Chimcomplex is today the largest producer of green hydrogen in Eastern Europe, with an annual production of over 6,000 tons. It is the only company in Europe’s 10 SE countries with real potential to use hydrogen as a raw material for green chemicals.  Currently, projects of over €55 million are in the final execution phase and projects worth over €125 million are being prepared and started.

PCC Exol Jan-Mar 24

PCC Exol recorded zl 8.98 million (€2.1 million) of consolidated net profit in the first quarter compared to zl 20.27 million profit (€4.8 million) in the first quarter last year.  The sales volume, despite being higher by 3,000 tons in the first quarter, did not translate into an increase in margins.  PCC Exol’s operating profit amounted to zl 14.15 million (€3.3 million) compared to zl 28.67 million profit (€6.7 million) a year earlier.  The EBITDA dropped to zl 18.35 million (€4.3 million) compared to zl 32.86 million (€7.7 million) a year earlier. 

Consolidated sales revenues amounted to zl 241.8 million (€56.6 million) in the first quarter versus zl 281.6 million (€65.9 million) in the same period in 2023.  The market has been and still remains saturated with chemical products, including surfactants. European producers have put into operation significant additional capacity, and Asian producers are active with cheaper products.  

The first quarter of this year saw stable demand from customers of industrial cleaning products and skimmers.  At the same time, it is worth noting that there is a very aggressive pricing policy of the competition. 

The company's offer in the field of industrial applications has been expanded to include products dedicated to the paints and varnishes industry as well as agrochemicals.  In the group of products for use in cosmetics and detergents, PCC Exol had to deal with very high price pressure, the cause of which is mainly due to the oversupply of mass surfactants in Europe and consumer expectations regarding further price declines.

Hungarian maleic anhydride exports Jan-Feb 2024

Hungary exported 5,753 tons of maleic anhydride in the first two months this year against 3,149 tons in the same period in 2023, with average prices dropping from €1317.7 per ton to €1141.6 per ton.  Exports to Poland from Hungary increased from 523 tons in January to February 2023 to 2,663 tons in the same period in 2024.  

Hungarian acrylonitrile imports Jan-Feb 2024

Hungary imported only 1,260 tons of acrylonitrile in the first two months in 2024 against 5,293 tons in the same period in 2023.  The Netherlands was the main source of imports in both years, shipping 1,260 tons in January to February 2024 versus 2,426 tons in the same period last year.  Acrylonitrile import prices dropped on average from €2120.0 per ton in last year to €1850.3 per ton this year. 

Hungarian aniline imports Jan-Feb 2024

Aniline imports into Hungary dropped from 27,541 tons in the first two months in 2023 to 23,322 tons in the same period in 2023.  Inward shipments from BorsodChem-MCHZ in the Czech Republic amounted to 20,074 tons against 11,576 tons last year.  Belgium supplied 3,248 tons in the first two months this year against 8,713 tons in the same period in 2023.  Cost prices of aniline imports dropped from €1450.1 per ton to €1353.1 per ton. 

Polish organic chemical trade Jan-Mar 2024

Exports of organic chemicals from Poland fell from 540,900 million tons in January to March last year to 380,600 tons in the same period in 2024, whilst for the same period imports dropped from 1.428 million tons to 932,700 tons.    

Methanol imports into Poland totalled 447,391 tons in January to March this year against 694,697 tons in the same period in 2022.  For other organic chemical imports Poland imported 8,306 tons of acetic acid in January to March against 9,285 tons in January to March 2023.  The US was the leading supplier, shipping 12,236 tons followed by the UK with 5,930 tons. 

Ethyl acetate imports into Poland amounted to 4,022 tons in January to March this year against 3,489 tons in January to March 2023.  Belgium provided the largest share of imports.  VAM imports amounted to 3,607 tons in the first quarter versus 3,745 tons last year.

Polish ethylene-propylene oxides and glycols

PCC Rokita’s capacity for propylene oxide was expanded to 57,000 tpa in 2021 which has helped reduce the dependency on imports which previously had played an important part in the company’s polyol production.  The reduction in imports has almost coincided with the gradual rise in propylene oxide prices over the past few years, increasing on average from €1332.0 per ton in 2020 to €2190.1 in 2023.  By volume propylene oxide imports dropped from 17,545 tons in 2017 to 257 tons in 2023. 

The contract price for propylene oxide in Europe started 2024 in the range of €2,000 to €2,100 per ton, maintaining consistency with the pricing observed in December.  This shift in pricing may be attributed to various market influences, including supply and demand dynamics, raw material costs, and broader economic factors impacting the industry.

Ethylene oxide imports into Poland totalled 5,467 tons in January to March versus 5,783 tons in January to March 2023.   Poland stopped importing ethylene oxide from Russia in May 2022 and Germany currently represents the main source of inward shipments.  Ethylene oxide is used in Poland mostly by PCC Rokita and PCC Exol.   Ethylene glycol imports increased in the first three months to 13,551 tons versus 28,014 tons in the same period last year.  Belgium supplied the largest volume of glycols to the Polish market.

Regarding export activity in organic chemicals, exports of methanol from Poland amounted to 51,847 tons in January to March against 86,483 tons in January to March 2023.  Germany imported 28,140 tons in the first quarter against 22,461 tons in the same period in 2023, whilst Ukraine reduced imports slightly to 6,216 tons against 7,364 tons. 

Polish shipments of monochloroacetic acid (MCAA) declined sharply in the first three months to 7,280 tons against only 10,220 tons in the same period in 2023.  The destinations for Polish MCAA exports are spread throughout Europe including Germany, Italy, France and Spain.  Other organic chemical exports from

Poland include acetone where shipments amounted to 3,774 tons in the first three months this year versus 3,993 tons in January to March 2023.   Normal butyl acetate exports dropped from 3,394 tons to 2,182 tons in January to March 2024.  The largest destination for Polish butyl acetate exports is Germany.

Central European methanol trade Jan-Mar 2024

Methanol imports into Poland totalled 149,775 tons in January to March this year against 173,327 tons in the same period in 2023.  Average prices amounted to €320.4 per ton against €306.8per ton last year. 

Poland has been developing alternative sources to Russian methanol before the full embargo took full effect in June 2023.   Apart from Venezuela and Belgium, other new sources arrived this year from the US and Trinidad.  

Norway supplied 25,600 tons of methanol to Poland in the first quarter in 2024 versus 14,752 tons in the same period in 2023, whilst imports from Venezuela increased from 12,706 tons to 35,245 tons. 

Czech imports of methanol amounted to 18,260 tons in the first quarter in 2024 versus 20,039 tons in the same period in 2023.  Imports from Poland dropped from 13,311 tons to 12,348 tons.  Prices per ton for methanol imports into the Czech Republic rose from €382.2 in 2023 to €386.6 in January to March 2024. 

Methanol imports into Hungary in the first two months in 2024 increased to 15,411 tons against 12,861 tons in the same period in 2023.  The largest supplier to the Hungarian market was Germany which provided 11,608 tons versus 4,393 tons in the same period last year.  Slovenia was the second largest supplier providing 2,374 tons.

Grupa Azoty production Jan-Mar 2024

Grupa Azoty’s estimated financial results for the first quarter still show difficulties in returning to profitability.  Only the fertiliser section recorded a minimal profit in the first quarter.  The new management board of Grupa Azoty has a difficult task ahead to create a recovery plan for the company and convince financial institutions to continue different forms of communication.  

Overall Grupa Azoty generated consolidated revenue of zl 3.399 m and an EBITDA of minus zl 50 million, with an EBITDA margin of minus 1.5%.   Demand for the products offered by the Grupa Azoty Group remained too low for the Group's operating profitability to recover, especially in the face of a further decline in their prices.  The Azoty Management Board's goal is not only to survive from month to month, but also to get the company back on track, which means that more decisive measures will have to be introduced.

Grupa Azoty’s production in the first quarter was slightly higher in a number of product areas against the same quarter last year, although the group remains under pressure from market demand and costs.  Nitrogen fertiliser production increased from 707,000 tons in the first three months in 2023 to 743,000 tons in the same quarter this year whilst oxo alcohol production at Kedzierzyn-Kozle rose from 21,000 tons to 40,000 tons.  

Grupa Azoty expects that 2024 will be a difficult year in terms of results, and the fertiliser season will largely determine its financial situation.  The group is looking for additional capital, also for development activities, and is also reviewing its strategy.

2023 was particularly challenging for the group with total EBITDA of minus €307.1 million against an EBITDA in 2022 of plus €529.4 million.  Even the 2022 results were difficult but then the results in 2023 have forced the group to undertake significant changes.  

In 2023, the prices of all oxo alcohols in Europe fell on average by 27%. Prices of n-Butanol and 2-EH remained below the five-year average in the second half of the year. The downward trend persisted for three quarters, with prices increasing by 8% quarter on quarter in the final quarter of the year. The price decline was driven by the falling contract prices of the main raw material, i.e., propylene (down 21% year on year), and the structurally weak demand in downstream processing industries.

Margin targets have been set for 2024-2025 at 16%, which the group needs to be able to operate efficiently without the need for extra capital support.  However, the fourth quarter last year yielded a margin of -0.3% and thus achieving a double-digit margin in 2024 may not be realistic.  Overall, for 2023 the EBITDA margin totalled -13.0% which was down from +14.1% in 2022.  Some benefits may be seen from stabilising gas prices in addition to most key raw materials such as propylene and benzene.  Melamine production was revived at the Melamine III plant at Pulawy the first quarter.   The capacity of the unit occupies approximately one third of the production capacity of all melamine units at Azoty in Pulawy, which totals 270,000 tpa.

Grupa Azoty is depending on the start-up of Polimery Police to inject a boost to incomes.  This is an investment that has severely strained the group's financial capabilities.  The Plastics Segment's operations posted an EBITDA margin of minus 79.8% in the fourth quarter last year, mainly due to the impact of high start-up costs incurred by its subsidiary, Grupa Azoty Polyolefins.

Azoty could give equity stakes in Polimery Police

Grupa Azoty is examining the interest of financial and industry entities in acquiring equity stakes in the Polimery Police project.  The level of shares in the Polimery Police project, which would be taken over by the new partner or partners, is still to be discussed.

Russian chemical production Jan-Mar 2024

Chemical production in Russia increased for many products over the course of the first quarter and to date has been unaffected by any feedstock shortages that might occur from the ongoing drone attacks on refineries.  Naphtha production in Russia dropped by 30% in the first quarter this year against the same period in 2023, falling from 2.931 million tons to 1.974 million tons.  Refineries in the north west and south of Russia reported the biggest fall in naphtha output.    

The main petrochemical monomers, ethylene, propylene and benzene all recorded increases in the first quarter this year.  Ethylene production increased from 1.129 million tons in the first three months last year to 1.246 million tons this year whilst propylene increased from 701,900 tons to 723,400 tons.  Methanol production increased marginally from 972,200 tons to 985,600 tons, with domestic merchant sales helping to offset the decline in exports.

Although the chemical industry in Russia has largely been isolated from the war itself, the sanctions have had a significant impact both in terms of access to plant technology and higher value commodity raw materials.  To an extent the industry adjusted to a new regime of market sales and has replaced some external sourcing with internal sourcing.  The abrupt decoupling of Western involvement in the Russian chemical industry seems likely to restrict growth for the Russian chemical industry in the medium to long-term.  

In the absence of Western competitors’ domestic chemical producers and suppliers have been able to exploit obvious opportunities and this this helps to account for the rise in production across numerous mainstream products.  Profit margins in 2023 and so far in 2024 for most chemical producers have been generally lower than pre-2022 levels, and this may limit scope for maintenance expenditure and future investment.  In the first quarter domestic demand for chemicals and polymers was relatively stable although some regions such as Tatarstan observed a slowdown or a pause in growth.  Russian export trade with China continues to play a key role in the market calculations of producers, whilst China has also filled import gaps for raw materials that were previously purchased in the West.  Overall methanol represents the largest outward product from Russia to China and PTA the largest inward product. 

Russian polymer production Jan-Mar 2024

Russian bulk plastics production amounted to 2.763 million tons in the first quarter against 2.662 million tons in the same quarter last year.   Russian production of polyethylene rose from 868,300 tons in January to March 2023 to 912,100 tons in the same period this year. 

Polypropylene production increased from 554,600 tons in the first quarter in 2023 to 584,500 tons in the same period in 2024.  Polystyrene production dropped from 139,400 tons to 554,600 tons whilst PVC production declined from 210,600 tons to 199,500 tons.  Demand for PVC recovered in 2023 after a difficult year in 2022, whilst production problems caused by missing raw materials have been largely overcome.  Consumption levels are still lower than in 2021.  Russian production of synthetic rubbers amounted to 376,800 tons in the first three months in 2024 compared to 373,200 in the first quarter in 2023.  Production has been helped by some improvement in tyre manufacturing in the first quarter, whilst also rubber exports to China have increased.

Nizhnekamskneftekhim EP-600 cracker commissioning

Nizhnekamskneftekhim is aiming to start the commissioning its new EP-600 cracker in 2024, with start-up of production expected in early 2025.  The launch of benzene and butadiene production units is scheduled for later in 2025.  The project still requires the commissioning of compressors, the pyrolysis furnaces and a steam turbine.    

The project configuration for the EP-600 cracker has altered since Nizhnekamskneftekhim was taken over by SIBUR from TAIF.  Previously Nizhnekamskneftekhim wanted to make polypropylene from propylene at the PP-400 unit, but this part of the project was scrapped by SIBUR.  One objective of the new cracker will be to supply more ethylene to Kazanorgsintez which requires further feedstock beyond its own production. 

The consumption of raw materials required to operate the EP-600 plant is estimated at 1.770 million tpa.   The production capacities include 600,000 tpa of ethylene, 480,000 tpa of propylene, about 180-200,000 tpa of benzene and other by-products.  Nizhnekamksneftekhim is unable to estimate when full capacity utilisation will be achieved, but this is unlikely prior to 2026.  The reason for this slow approach is due to the need to find alternative derivatives and decisions which are yet to be finalised.  Other derivatives being considered include the styrene chain, namely ethylbenzene–styrene–polystyrene, or as an alternative more polyethylene. 

Nizhnekamskneftekhim is supervising the installation and commissioning of the ethylene complex without the participation of the licensor Linde AG, which supplied the main range of technological equipment and then, due to sanctions, refused to continue the project.  The work is being carried out by SIBUR by specialists who commissioned ZapSibNeftekhim.

Amur Gas Chemical Complex-project timing

The completion of the Amur Gas Chemical Complex has already been delayed significantly by sanctions and equipment deliveries, whilst there are also other factors to take into consideration that could affect the start-up date.  It is likely that the Amur Gas Chemical Complex (AGCC) may face a very acute shortage of personnel, which have been influenced by mass call-ups for the armed forces. 

The readiness of the Amur Gas Chemical Complex had achieved 47% by mid-May, according to SIBUR.  About 15,000 people work at the site currently which is expected to rise to 20,000 people in the second half of 2024 and will reach a peak of 25,000 people in 2025.  The project, which includes the production of 2.3 million tpa of polyethylene and 0.4 million tpa of polypropylene, faced the refusal of European partners to supply equipment.  The management claims that it has managed to enter new markets, to find new supply chains, and to agree on a schedule for completion of the construction process by 2026 and launch of the plant by 2027. 

Russian ethylene production Jan-Mar 2024

Russian ethylene production totalled 1.246 million tons in the first quarter in 2024 against 1.178 million tons in the same period in 2023.  The largest producer ZapSibNeftekhim at Tobolsk produced 408,968 tons in January to March 2024, up from 393,036 tons from January to March 2023.

ZapSibNeftekhim is only one of three ethylene plants in Russia that is not connected to other producers or consumers through pipeline.  The other two other stand-alone plants include Stavrolen and SIBUR-Khimprom.   The main ethylene pipeline is located in the Volga-Urals region.  The southern branch provides ethylene supply from Nizhnekamskneftekhim to Ufaorgsintez, Bashkir Soda Company, and Gazprom neftekhim Salavat.  The northern branch supplies Kazanorgsintez where its own ethylene production is lower than required for polymer capacity.  Kazanorgsintez uses ethane technology for the production of ethylene, receiving ethane through a pipeline system from the Orenburg region.