Russian methanol producer balances

PKN Orlen second quarter and first half in 2021

The Orlen Group posted a record-high EBITDA of zl 3.2 billion in the second quarter (€699.4 million), up by zl 1.2 billion (€263.4 million) over the same period in 2020.  The main contributors to the group’s performance comprised power generation and petrochemicals.  More than half of the Orlen Group's sales revenues come from foreign markets.  Orlen’s refining volumes rose 10% in the second quarter to 6.8 million tons. 

Overall for the second quarter revenues for the Orlen Group increased by 73% to zl 29.4 billion (€6.426 billion), even if sales of oil products and petrochemicals rose by only 9% to 9.3 million tons.  Maintenance at the Olefin 11 cracker at Plock meant that production and sales of petrochemicals were down in the first half of 2021 against 2020. 

Orlen’s petrochemical production generated earnings of over zl 1.021 billion in the second quarter, representing a fourfold increase over the same period in 2020.  Quarterly comparisons with 2020 are complicated due to the effects of the pandemic on economic activity, but at the same time second quarter profits from petrochemicals were higher than in any previous quarter on record.

Following the scheduled shutdown of the Olefins unit in Plock for routine maintenance, sales volumes in Poland in the second quarter fell by 27%, although sales in the Czech Republic and Lithuania rose by 58% and 367% respectively.  Orlen Unipetrol underwent a force majeure for polypropylene sales in June.  The 345,000 tpa plant was closed on 25 May.

Orlen Group’s production of monomers dropped from 476,000 tons in the first half last year to 316,000 tons whilst polymer production increased from 164,000 tons to 301,000 tons.  Aromatics production rose from 156,000 tons to 167,000 tons whilst fertiliser production at Anwil increased from 425,000 tons to 574,000 tons.  PTA production at Wloclawek amounted to 289,000 tons in the first half of 2021 against 291,000 tons in 2020 whilst sales dropped from 298,000 tons to 287,000 tons.

Orlen Lietuva was the only group plant to report higher than 90% utilisation rates at its propane-propylene splitter, having achieved 92% in the first quarter this year.  The total volume of sales in the second quarter of 2021 fell 4% to 1.0 million tons, including a drop of 69% for olefins and 22% for PVC.  Polyolefin sales for the group rose though by 23% helped by propylene imports into Poland, whilst the production of fertilisers and PTA at Wloclawek increased by 12% and 3% respectively. 

Petrochemical revenues for the Orlen Group dropped from zl 2.524 billion (€551.7 million) in the first half of 2020 to zl 2.170 billion (€474.3 million) in the same period this year.  Revenues from monomer sales fell from zl 1.351 billion (€295.3 million) to zl 892 billion (€195.0 million).  Thus, it is a mixed picture for the petrochemical division in that although prices of ethylene increased by 23% and propylene by 33% the group was restricted from maximising the returns from higher margins by restrictions on production in Poland. 

Ethylene production at Plock fell from 240,800 tons to 99,400 tons whilst propylene dropped from 224,300 tons to 112,100 tons.  Over the first six months of 2021, the amount allocated by the Orlen Group to investments came to zl 4.2 billion (€918.0 million). PKN Orlen launched a new project under its Petrochemical Development Programme, which is the Olefins III Complex, expected to add some zl 1 billion annually (€220 million) to the Group’s operating profit.  The contractor for the petrochemical project is expected to be a consortium of Hyundai Engineering and Técnicas Reunidas. 

PKN Orlen-PTA Jan-Jun 2021

PKN Orlen’s production and sales of PTA was slightly lower in the first half in 2021, with production at Wloclawek dropping from 291,000 tons in the first half last year to 289,000 tons.  Production was affected this year by paraxylene tightness, a trend which continued into April, but the position improved in May with plant will supplying minimum contract volumes. 

Orlen sold 287,000 tons of PTA in January to June 2021 against 298,000 tons in the same period in 2020.  Revenues rose from zl 691 million (€151.4 million) to zl 763 million (€167.2 million) with average prices rising from €508 per ton to €583.  Export revenues amounted to €123.765 million in the first six months in 2021, equating to €595 per ton.

PTA exports from Poland amounted to 207,210 tons in the first six months in 2021 against 186,854 tons in the same period in 2020.  Shipments to Germany increased to 178,200 tons from 147,300 tons in January to June 2020. Other destinations for Polish PTA include Lithuania and Belarus, with volumes rising in 2021 to Lithuania and dropping for Belarus.  Imports of PTA into Poland rose to 26,900 tons in the first six months in 2021 against 12,700 tons in the same period in 2020.

Polish propylene imports, Jan-Jun 2021

Propylene imports into Poland amounted to 121,200 tons in the first six months in 2021 against 70,200 tons in the same period in 2020. 

Lower propylene production from the cracker by PKN Orlen has been the cause of higher imports this year.  Germany supplied 58,300 tons of propylene to the Polish market in January to June 2021, up from 1,054 tons, followed by Ukraine which was down from 39,900 tons to 34,100 tons.   

Czech petrochemical trade, Jan-Jun 2021

Butadiene imports into the Czech Republic totalled 38,444 tons in the first six months in 2021 versus 26,119 tons in the same period in 2020.  This continues the upward trend from 2020.  In January to June 2021 Germany supplied 32,346 tons of butadiene to the Czech market for €23.063 million followed by Hungary with 5,160 tons for €3.874 million. 

For other monomers, propylene imports in the first six months dropped from 26,409 tons to 23,994 tons whilst styrene imports rose from 18,061 tons to 29,379 tons.  Benzene imports increased to 44,195 tons. 

Regarding export activity, the Czech Republic increased benzene shipments in the first six months to 21,753 tons from 10,215 tons whilst ethylbenzene exports rose from 29,424 tons to 58,563 tons.  All of the ethylbenzene is exported to Poland.

MOL second quarter and first half in 2021

In the first six months the MOL Group achieved an EBITDA of $1.559 billion and for the second quarter an all-time high EBITDA of $893 million which was 153% higher than in the second quarter in 2020.  Downstream results were driven by strong petrochemical performance on the back of strong polymer demand, whilst refining continued to be affected by lower fuel demand across the Central European region. 

MOL’s downstream Q2 EBITDA increased by 305% to $447 million, boosted by very strong petrochemical performance while refining margins gradually recovered from the lows of Q2 2020. For the first half of 2021 the downstream division generated 73% better result than in the same period last year. The downstream result was driven primarily by performance in petrochemicals, which in addition to higher production saw its integrated margin achieving an all-time high of €1035.8 per ton in April.

MOL’s large polyol project had exceeded 84% of its construction schedule by the end of Q2, whilst the  MOL Group has launched a joint project with Tatneft to build a rubber-modified bitumen in Russia.

PCC Rokita-polyols exports Jan-Jun 2021

PCC Rokita increased production of polyols to 49,100 tons in the first half of 2021 against 43,100 tons in the same period in 2020.  From the production of 49,100 tons the company exported 36,147 tons of polyols at a total cost of €88.746 million compared to 27,920 tons for €49.096 million in the same period in 2020.  All five production lines jointly amount to a capacity of 110,000 tpa of polyether polyols.  PCC Rokita to start maintenance at No. 2 and No. 3 polyols unit at Brzeg Dolny.

 PCC Rokita recorded an unchanged margin of 14% in the first half in 2021 from a turnover of €99 million against €80 million in the same period in 2020.  Materials and energy used amounted to 56% of total costs which amounted to €94.2 million which was €24.5 million higher than in January to June 2020.  Raw materials include propylene, benzene and ethylene oxide.  In addition to higher raw material costs PCC Rokita is faced by the challenge of higher electricity prices, which are rising following the rising prices of CO2 emission allowances.

PCC Exol Jan-Jun 2021

PCC Exol recorded an increase of 7.9% in sales in In the first half of 2021 over the same period in 2020 to a total of 49,400 tons.  Surfactants increased both for applications in detergents and cosmetics and industrial applications.  Sales revenues amounted to zl 301.1 million which was 15.8% higher than in 2020, although higher volumes and selling prices were offset by higher raw material prices, for ethylene oxide and natural alcohol which affected profitability.  As a result, PCC Exol achieved a sales margin of 17.8% which was down against 21% in the same period in 2020.  The EBITDA dropped in the first half of 2021 by 3% to zl 36.5 million.

PCC Exol undertakes production at Brzeg Dolny and Plock with on a total of five plants comprising ethoxylation I and II, sulphated I and II and formulations Industrial. The current production capacity of the company is 137,000 tpa including 102,000 tpa at Brzeg Dolny and 35,000 tpa at Plock, depending on the assortment produced and is specified for standard products.

Chimcomplex Jan-Jun 2021

Chimcomplex reported a net profit of €57.7 million in the first six months in 2021 based on a turnover of €238 million.  Sales on the foreign market, mostly aimed at European markets accounted for about 78% of total product sales in the first half of 2021.  The largest share of sales is held by polyols and caustic soda.  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. 

Chimcomplex achieved an EBITDA of €83 million in the first half of 2021 which was 36% of turnover.  This allowed the consolidation of the company’s financial position and the repayment of €52 million from the loans contracted in December 2018 for the acquisition of Oltchim’s assets.  For the second half of 2021, the company expects to consolidate the positive results.  The consolidation of the polyols and hydrogen portfolio, with a major impact on the decarbonization process, forms a key part of the company’s strategy.

Central European isocyanate imports, Jan-Jun 2021

The strong demand for polyurethanes in Central Europe is helping to drive the market for isocyanates where costs have been much higher this year.  MDI imports into the Czech Republic totalled 23,656 tons in the period January to June 2021 up from 14,212 tons in the same period in 2020.  Import costs rose in the first six months this year to €52.737 million against €19.403 million in the period January to June 2020.  TDI imports into the Czech Republic rose from 2,952 tons in January to June 2020 to 3,588 tons in the same period in 2021.

TDI imports into Poland amounted to 39,707 tons in the first six months in 2021 against 46,000 tons in the same period in 2020.  Costs of imports in the first half of 2021 totalled €104.798 million, equating to €2639 per ton.  Germany and Hungary were the two largest suppliers providing 12,723 tons and 18,607 tons in January-June 2021 respectively. 

MDI imports into Poland amounted to 85,461 tons in the first six months in 2021 against 63,700 tons in the same period last year.  Costs of imports in 2021 for the first half totalled €187.4 million.  Average prices per ton for the whole of 2020 amounted to €1364 but have risen to €2193 per ton in the first six months in 2021. Major MDI suppliers to the Polish market this year so far include Germany, Hungary and Belgium.

BorsodChem TDI-MDI planned outage and MDI expansion

BorsodChem’s TDI and MDI units in Hungary began a series of overhauls on 17 August which are expected to take until the end of September or up to 50 days.  The shutdown will comprise a technical upgrade of the MDI plant, which is expected to increase the production capacity from 300,000 tpa to 350,000 tpa.  BorsodChem’s maintenance started straight after Wanhua Chemical had completed its maintenance at the MDI plant at Shandong in China. 

Polish petrochemical imports, Jan-Jun 2021

Paraxylene imports into Poland amounted to 42,500 tons in the first half of 2021 against 9,500 tons in the same period in 2020.  Imports supplement paraxylene production at Wloclawek. 

Poland imported 66,200 tons of butadiene in the first six months in 2021 against 48,300 tons in the same period in 2020.  Hungary supplied 25,600 tons to Poland in the first six months this year for €18.9 million whilst Austria supplied 15,200 tons for €13.5 million.  The main buyer of butadiene in Poland is Synthos, as with styrene.  The acquisition of Trinseo’s rubber business has intensified the interest in securing sufficient stocks of butadiene and styrene. 

Central European methanol trade, Jan-Jun 2021

Methanol exports from MSK in Serbia amounted to 48,400 tons in the first five months in 2021 versus 45,900 tons in the same period in 2020, followed by a slight fall in acetic acid exports from 36,000 tons to 35,700 tons.  MSK runs its own fleet of rail wagons and uses the port of Bar in Montenegro. 

Polish methanol imports amounted to 343,200 tons in the first six months in 2021 from 359,700 tons in the same period in 2020 whilst exports fell from 104,600 tons to 95,000 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 and reduced shipments to 213,865 tons in January to June 2020 from 251,700 tons in the same period last year.  Shchekinoazot is one of the main suppliers of methanol to the Polish market which it ships by rail through Belarus.  Prices of methanol have risen sharply this year averaging €300 per ton in the first six months, almost double the average prices recorded in 2020.

Methanol imports into the Czech Republic amounted to 47,600 tons in the first six months in 2021 against 44,500 tons in same period in 2020.  Russian shipments into the Czech Republic rose from 17,800 tons to 28,900 tons, whilst at the same time volumes from Poland dropped from 18,800 tons to 10,700 tons.

Russian chemical production, Jan-Jun 2021

The production of chemicals and chemical products in Russia increased by 8.2% in the first half of 2021 compared to January-June 2020.  The production of rubber and plastic products increased by 16.2% whilst the production of synthetic fibres amounted to 102,700 tons.  For the six months of 2021, 13.3 million tons of fertilisers were produced amounting to 7.4% more than in January-June 2020. 

The production of plastics in primary forms in June amounted to 937,000 tons, which is 18.7% more than in June 2020, but 1.2% less than in May 2021. For the six months of 2021, the production of plastics in primary forms amounted to 5.5 million tons, which is 12.8% more than in January-June 2020.

Production of synthetic rubbers in June amounted to 135,000 tons which is 22.8% more than in June 2020, and 4.3% more than in May 2021.  For the six months of 2021, the Russian production of synthetic rubbers in primary forms amounted to 859,000 tons, which is 18.3% more than in January-June 2020.  The production of polymer-based paints and varnishes amounted to 636,000 tons in the first half of 2021 which is 9.9% more than in January-June 2020. 

Russian chemical trade Jan-Jun 2021

Higher prices have been seen across the board in the first half of 2021 for Russian exports and imports of organic chemicals, polymers and rubber.  Vaccine sales (Sputnik V) have driven up export values of pharmaceuticals.  Imports of pharmaceuticals into Russia amounted to $3.090 billion in the second quarter in 2020 against $611 million for exports. 

In the organic chemical sector export values were boosted by higher prices of methanol, acetone and caprolactam whilst import values were affected by higher costs for products such as isocyanates and PTA.  Overall chemical export revenues totalled $6.1 billion in the second quarter this year against $4.0 billion in the same period in 2020.

Exports of plastics and rubber from Russia totalled $2.6 million in the second quarter this year against $1.4 billion in the same period in 2020, helped significantly by the increase in polymer production at ZapSibNeftekhim.  Exports of plastics and rubber products totalled 1.557 million tons in the second quarter this year against 1.104 million tons in the same period in 2020.  Despite the rise in production imports increased to 1.416 million tons in the second quarter versus 1.120 million tons in 2020.

Amur Gas Chemical Complex-C3 peopylene splitter

The C3 propylene splitter for the Amur Gas Chemical Complex at Svobodny started its journey in late July from the Russian pacific seaport of De-Kastri (Khabarovsk Kray).  The column weight of the C3 splitter is 968 tons with a length of 111 metres and is planned for installation at the end of September 2021.  The column is being delivered to the construction site on the Tomsk barge, which returned in July to the port of De Kastri after the first column delivery to the unloading berth near Svobodny.

Delivery of the C3 splitter column will be carried out through Nikolaevsk-on-Amur, along the Amur and Zeya rivers, then the barge-tow train with the column will follow to a temporary pier located at 212 km of the Zeya River.  The barge will be able to use this navigational route from May until September.  From October to April equipment deliveries will need to be undertaken by road and rail.  The estimated completion date for construction of the Amur Gas Chemical Complex and start-up work has been set for 2024. 

Nizhnekamskneftekhim-ethylene project

Nizhnekamskneftekhim has completed the installation of compressors for the new olefin complex EP-600, in addition to starting installation of the overpass which is designed for laying pipelines and cable lines.  Around 30% of the olefin project was completed by the end of July. 

Nizhnekamskneftekhim is undertaking a project for the construction of polyethylene units with a capacity of 600,000 tpa integrated into the new ethylene complex, addition to the polypropylene plant of 400,000 tpa.  In February 2020, NKNK and Turkish Gemont signed a contract for the implementation of a complex of construction and installation works for the construction of the first stage of the ethylene complex.  The project is scheduled to be completed in July 2023.

RusKhimAlliance-Ust Luga gas processing and gas chemical

RusKhimAlliance, Linde and Renaissance Heavy Industries have signed an EPC contract for the construction of the gas processing facility at Ust-Luga on Russia’s Baltic coastline.  Linde and Renaissance Heavy Industries consortium have been contracted to carry out work on the design, supply of equipment, construction and commissioning of gas processing facilities and the industrial plant of the gas processing complex.  The total investment in the project to create a complex at Ust-Luga will amount to about 3 trillion roubles ($41 billion).  This can be broken down into 50% investment into processing ethane-containing gas and 50% into petrochemicals.  Questions on finance are complicated, one part option includes funds being provided by the National Welfare Fund, which is designed in principle to cover pensions, but is used occasionally for large-scale projects where there is government interest.

The first part of the Ust Luga site consists of an integrated natural gas processing and liquefaction complex (RusKhimAlliance, Gazprom JV and Rusgazdobycha).  The second is the interlinked gas-chemical complex Baltic Chemical Complex which is a subsidiary of Rusgazdobycha. 

Lummus has been commissioned to supply a total of 14 furnaces for the production of ethylene for the Baltic Chemical Complex whilst a number of license agreements for polyolefin capacities have already been signed.  Rusgazdobycha, Gazprom and Linde have created an engineering company Gazprom Linde Engineering on the basis of the design institute Salavatgazoneftekhimproekt. 

Irkutsk Oil Company-polymerisation unit installed

The largest piece of equipment the polymerisation reactor has been installed at the Irkutsk Polymer Plant at Ust-Kut. The weight of the unit is 538 tons, height 44.5 metres, and diameter 9.6 metres.  Currently, 33 units of equipment out of 44 have been installed at the construction site. 

The construction of the polymer plant is being carried out by the Irkutsk Oil Company.  Delivery of 45 pieces of equipment from the port of South Korea to Ust-Kut was completed in September last year.  At present, work is being completed on the preparation of foundations for installation, and the assembly of the main crane with a lifting capacity of 1,600 tons is underway. 

Installation is expected to be completed by September 2021.  The Irkutsk Polymer Plant is the first ethane polymer plant in East Siberia, using its own raw materials from the oil and gas fields in the northern part of the Irkutsk Oblast.  The production capacity of the polyethylene plant is being designed at 650,000 tpa.  In addition to polyethylene the Irkutsk Oil Company (INK) intends to build a second helium plant at the Markov field in the Irkutsk region, which will allow the company to become the second largest producer in Russia.  Currently, the company is building its first helium plant in the Yarakta field which is planned for launch in 2022.  The second plant is planned to be built by 2025.

SIBUR Jan-Jun 2021

SIBUR’s revenue increased in the second quarter by 15.8% to 200.9 billion roubles ($2.734 billion), compared to 173.4 billion roubles in the first quarter ($2.361 billion).  Overall SIBUR’s turnover amounted to 374.340 billion roubles ($5.097 billion) in the first half of 2021 against 335.316 billion roubles ($4.565 billion) in the same period in 2020. 

Revenues from sales of olefins and polyolefins (predominantly the latter) rose from 91.715 billion roubles ($1.249 billion) in the first half of 2020 to 190.595 billion roubles ($2.599 billion) in the same period in 2021.  This meant that the product group accounted for more than half of the group’s turnover.

SIBUR’s sales and production Jan-Jun 2021

SIBUR increased sales of most of its petrochemical products in the first half in 2021 mainly through increased production of olefins and polyolefins as ZapSibNeftekhim reached its design capacity utilisation rate.  Elsewhere, SIBUR increased PTA production in the first half this year to 145,700 tons against 116,200 tons in January to June 2020, whilst butadiene production increased from 98,500 tons to 132,500 tons. 

Operating results

SIBUR’s operating expenses increased in the second quarter by 3.9%, rising from 115.6 billion roubles ($1.574 billion) over the first quarter to 120.1 billion roubles ($1.634 billion) due to the significant increase in the cost of feedstock and a rise in transportation and logistics costs.  This was also compounded by higher repairs and maintenance costs.

SIBUR’s gas processing plants processed 5 billion cubic metres of associated gas in the second quarter, up 3.1% quarter the first quarter in 2021.  Raw NGL fractionation volumes remained nearly unchanged from Q1 2021 at 2.0 million tons.

SIBUR’s EBITDA in the olefins and polyolefins segment increased by 41.4% to 51.5 billion roubles ($701.2 million).  For the first half of this year SIBUR’s EBITDA rose 183.4% over the same period in 2020 due to an increase in the production of polypropylene and polyethylene at ZapSibNeftekhim.  Sales of plastics and organic synthesis products by the SIBUR Group remained unchanged from Q1 2021 at 204,000 tons. Sales of elastomers decreased by 13% to 94.500 tons.

External sales of plastics, elastomers and intermediates decreased by 8% in the second quarter against the first quarter, primarily due to maintenance works at the company’s Voronezh site.  External sales of LPG and naphtha increased by 5% and 26.4%, respectively, due to lower internal consumption, as well as due to higher production volumes at ZapSibNeftekhim.  Higher costs were driven mainly by an increase in feedstock expenses amid higher purchasing volumes of raw NGL and naphtha and higher prices.  Paraxylene costs also more than doubled due to higher purchases by Polief for the production of PTA.

TAIF petrochemical performance Jan-Jun 2021

The main petrochemical assets of TAIF including Nizhnekamskneftekhim and Kazanorgsintez in the first half of 2021 increased net profit several times over the same period in 2020.  Kazanorgsintez increased its net profit three-fold in the first half of 2021 to 14.695 billion roubles ($200.0 million), whilst revenue rose 68% to 52.602 billion roubles ($716.2 million).  Gross profit for Kazanorgsintez increased to 22.5 billion roubles (€306.3 million) against 7.87 billion roubles ($107.2 million) in the first half of 2020, while profit from sales increased by 3.8 times to 19.3 billion roubles ($262.8 million).  The performance results of Kazanorgsintez are primarily due to the recovery of the polymer market after the serious crisis of the last year. 

Nizhnekamskneftekhim (increased net profits from 2.9 billion roubles ($39.484 million) to 24.9 billion roubles ($339.0 million) in the first half of 2021.  The company's revenue increased by 1.8 times to 118.2 billion roubles ($1.609 billion) against 67.1 billion roubles ($913.6 billion) in the same period in 2020.  Gross profit increased by 2.3 times to 38 billion roubles ($517.4 million), which is 21.6 billion ($294.0 million) more than in the first half of 2020 (16.5 billion roubles or $224.6 million).

In the first half of 2021, Nizhnekamskneftekhim produced 1.35 million tons of marketable products of all types, which is 170,000 tons higher than in the same period last year.  The production of rubbers ncreased to 336.400 tons in the first half of 2021 against 262,700 tons for the same period last year. The production of plastics amounted to 357.400 tons.  Nizhnekamskneftekhim continues to expand its rubber range following the introduction of new products DSSK, rubber SKD-777, and thermoplastic TEP in addition to polyethylene glycol H-PEG-2400.

The production of DSSK is a strategically important project of the company, whilst also introducing SKD-777 rubber (lithium polybutadiene) based on the company’s own technology which was developed in 2018.  In 2021, its development on an industrial scale began. SKD-777 is used in the formulation of tread rubber compounds in the production of passenger and light truck tyres of the summer and all-season range.

 The production of ethylene in the TAIF Group totalled 622,700 tons in the first half of 2021 against 646,800 tons in the same period in 2020.  Propylene amounted to 184,500 tons against 181,900 tons.  Kazanorgsintez increased polycarbonate production in 2021 following capacity expansion whilst HDPE production dropped from 271,100 tons in the first half of 2020 to 206,000 tons in the same period in 2021.

Russian ethylene production totalled 2.260 million tons in the first six months in 2021 against 2.110 million tons in the same period in 2020.  ZapSibNeftekhim produced 732,500 tons of ethylene up from 510,900 in January to June 2020.  Other Siberian producers include Tomskneftekhim, which reduced production from 142,700 tons to 141,600 tons and Angarsk Polymer Plant which was down slightly to 112,000 tons. 

In Tatarstan Nizhnekamskneftekhim reduced ethylene production from 328,300 tons to 323,600 tons whilst Kazanorgsintez reduced production from 318,500 tons to 299,100 tons.  Both producers belong to the TAIF Group, and both reported weak financial results for 2020.  In Bashkortostan Ufaorgsintez reduced ethylene production to 37,300 tons from 66,800 tons in January to June 2020 after encountering a fire at the cracker in February.  Gazprom neftekhim Salavat reduced production slightly from 193,100 tons to 180,200 tons. 

Smaller Russian ethylene producers include Novokuibyshevsk Petrochemical, in the Samara region, and SIBUR-Khimprom in the northeast Urals.  Production at Novokuibyshevsk increased in the first six months in 2021 to 27,200 tons from 23,800 tons whilst SIBUR-Khimprom at Perm produced 19,700 tons against 19,200 tons. 

In the Nizhniy Novgorod region SIBUR-Kstovo produced 202,800 tons of ethylene in the first six months in 2021 against 209,300 tons in the same period in 2020.  In the Stavropol region Stavrolen produced 174,000 tons of ethylene versus 175,600 tons in January to June 2020.  Stavrolen uses ethylene for the production of HDPE and VAM.

Regarding the ethylene market in Russia prices of product shipped through the pipeline connecting the plants in Bashkortostan and Tatarstan increased by 7% in June, rising to 72,400-72,600 roubles per ton.  In July, repair work continues at the Angarsk Polymer Plant followed by a planned stoppage by Gazprom neftekhim Salavat which reduced the supply of ethylene to the Bashkir Soda Company.

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

Russian propylene production totalled 1.544 million tons in the first six months in 2021 versus 1.315 million tons in the same period in 2020.  The Tobolsk two-plant hub controlled by SIBUR produced 643,800 tons of propylene against 385,200 tons in January to June 2020. 

At Kstovo in the Nizhniy Novgorod region Lukoil-NNOS reduced production from 111,400 tons to 107,800 tons in the first six months this year and SIBUR-Kstovo reduced production from 91,800 tons to 89,900 tons.  In Bashkortostan Ufaorgsintez reduced production from 95,600 tons to 86,900 tons in January to June 2021, which was down due the outage in February whilst in Tatarstan Nizhnekamskneftekhim increased production slightly from 157,600 tons to 159,500 tons.

Sales of propylene on the domestic dropped in the first six months in 2021 to 156,400 tons versus 227,100 tons in the same period in 2020.  Due to maintenance at the acrylonitrile plant on which started on 15 May Saratovorgsintez at Saratov reduced purchases from 80,200 tons to 65,000 tons whilst SIBUR Tobolsk reduced purchases from 55,600 tons in 27,700 tons mainly due to the integration with ZapSibNeftekhim and increased production.  Of the suppliers Lukoil-NNOS reduced shipments on the domestic market to 64,400 tons from 100,500 tons in the same period in 2020 whilst SIBUR-Kstovo reduced shipments from 80,700 tons to 66,500 tons. 

Propylene exports from Russian producers amounted to 48,900 tons in the first six months in 2021 against 20,300 tons in the same period in 2020. 

The Angarsk Polymer Plant exported 17,700 tons of propylene in January to June 2021 against no activity 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.  Nizhnekamskneftekhim and Gazprom neftekhim Salavat were required to buy monomer on the market over the summer months for internal processing. 

The propane dehydrogenation unit at ZapSibNeftekhim was shut for several days in July which meant that SIBUR increased the supply of propylene to the Tobolsk plant from other production sites. Propylene was also supplied to the market by Kazanorgsintez in July as the phenol plant was down for maintenance. 

SIBUR will carry out a scheduled shutdown repair of the Tomskneftekhim production complex in August 2022, during which it also plans to upgrade the flare unit.  The company is investing 140 million roubles in the aim of modernising the Tomsk plant under the terms of SIBUR's comprehensive environmental safety programme.  Tomskneftekhim includes capacities of 300,000 tpa of ethylene and 139,000 tpa of propylene.  SIBUR has launched a project at ZapSibNeftekhim to modernize the propane dehydrogenation unit.  The modernisation planned for 2021-2022 will increase its capacity by more than 8% up to 561,000 tpa. 

Russian styrene production and sales, Jan-Jun 21

Russia produced 390,400 tons of styrene in the first six months in 2021 versus 360,300 tons in the same period in 2020.  The largest producer Nizhnekamskneftekhim produced 155,400 tons to 149.400 tons.  Gazprom neftekhim Salavat increased production from 92,400 tons to 104,200 tons and SIBUR-Khimprom dropped from 73,000 tons to 72,800 tons. 

Domestic merchant sales for styrene monomer rose from 53,400 tons in the first half of 2020 to 72,100 tons in the same period in 2021.  Nizhnekamskneftekhim consumes most of its styrene monomer in the production of polystyrene and synthetic rubber.  Gazprom neftekhim Salavat increased sales from 28,100 tons to 33,600 tons and SIBUR-Khimprom increasing from 14,600 tons to 22,200 tons. 

SIBUR-Khimprom has completed commissioning works which will allow the company to start shipment of styrene to automobile tanks.  SIBUR-Khimprom normally sends shipments styrene for customers to railway tanks, but shipment to road transport will allow the company to meet the needs of customers who require a small amount of products. The shipment of styrene to tankers will allow the company to increase the number of customers in the Central and Volga regions, where it will be profitable to deliver products by road from Perm.

In the first six months of 2021, HDPE production in Russia amounted to 1.001 million tons, which is 12% more than in 2020.  ZapSibNeftekhim increased production by 46% over January to June to 576,200 tons, which is 46% more than in 2020, whilst due to greater focus on LLDPE Kazanorgsintez reduced production by 24% to 206,000. 

Stavrolen reduced production slightly from 163,900 tons to 160,700 tons and Gazprom neftekhim Salavat reduced production from 64,400 tons to 58,500 tons.  Gazprom neftekhim Salavat started maintenance on both HDPE and LDPE plants from 20 July for around thirty days.  Capacities include 120,000 tpa for HDPE and 45,000 tpa for LDPE. 

HDPE exports from Russia increased from 197,000 tons in the first six months in 2020 to 477,000 tons in the same period in 2021, with revenues rising from $151.7 million to $460 million.  China was the largest destination for Russian HDPE, amounting to 287,000 tons against 91,900 tons in the first half in 2020.

Russian polypropylene exports Jan-Jun 2021

Russian polypropylene production increased by 13% in the first half of 2021 to 1.025 million tons.  ZapSibNeftekhim increased production to 568,300 tons against 420,600 tons from the Tobolsk hub in January to June 2020.  Polyom at Omsk produced 104,000 tons in the first half of 2021 which is 11% up whilst Nizhnekamskneftekhim produced 109,800 tons versus 110,000 tons.  NPP Neftekhimiya (Kapotnya) produced 75,300 tons, which corresponds to the same level in 2020, whilst Tomskneftekhim reduced volumes by 3% to 74,700 tons.  Ufaorgsintez reduced production by 5% to 63,100 tons whilst Stavrolen dropped 3% to 60,800 tons. 

Turkey was the largest destination for Russian exports of polypropylene in the first six months in 2021, taking 104,500 tons, followed by Poland with 57,800 tons and China 33,400 tons. 

SIBUR polyolefins Jan-Jun 2021 

SIBUR’s revenue in the olefins and polyolefins sector rose by 110.3% in the first half in 2021.  The result was largely due to higher polyethylene and polypropylene sales facilitated by a higher utilisation rate at ZapSibNeftekhim. 

The olefin and polyolefin segment’s EBITDA margin for SIBUR rose to 42.7% versus 27.1% for the same period in 2020.  SIBUR’s revenues from sales of polyethylene increased in the first half to 76.681 billion roubles ($1.043 billion) against 29.929 billion roubles ($407.5 million) in the first half in 2020 whilst polypropylene revenues rose from 33.985 billion roubles ($462.7 million) to 67.268 billion roubles ($915.9 billion).  SIBUR’s polyethylene sales increased so significantly due to the higher HDPE and LLDPE production at ZapSibNeftekhim, mainly in a rise in export activity.

Production of polyethylene by SIBUR increased from 645,049 tons in the first six months in 2020 to 875,787 tons in the same period this year whilst polypropylene rose from 506,400 tons to 644,100 tons.  The share of export sales fell 57.2% of total polyethylene revenue from 33.7% in 2020 versus 76.6% in the same period last year.  SIBUR sold 627,000 tons of polyolefins on the domestic market in January to June 2021 which was significantly down against 351,100 tons in the same period in 2020. 

Russian PVC market Jan-Jun 2021

Russian PVC production amounted to 515,900 tons in the first half of 2021 versus 509,300 tons in the same period in 2020.  RusVinyl reduced production from 177,100 tons to 175,300 tons and Sayanskkhimplast reduced from 165,000 tons to 156,300 tons. 

Bashkir Soda Company increased production by 8% to 140,500 tons and Kaustik increased production from 36,500 tons to 43,200 tons.  Sayanskkhimplast resumed operation of facilities on 12 July after a ten-day maintenance shutdown, whilst Bashkir Soda Company also underwent maintenance between 10-28 July. 

Russian paraxylene exports Jan-Jun 2021

Russian paraxylene exports amounted to 51,500 tons in the first half of 2021 against 59,400 tons in the same period in 2020.  Average prices per ton increased for Russian exports from $471.9 in the whole of 2020 to $617 in the first half of 2021.  Exports in the first six months were divided between Belarus (6,122 tons for $5.125 million) and Finland (45,029 tons for $25.955 million). 

Russian PTA imports, Jan-Jun 2021

PTA imports into Russia amounted to 134,800 tons in the first six months in 2021 versus 155,800 tons in the same period in 2020.  China was responsible for all of the deliveries in 2021 tons compared to accounting around 90% of imports in 2020. 

Average prices for PTA imports amounted to $627.1 per ton in January to June 2021 against $619.3 per ton in the same period in 2020.  Although PTA costs per ton for imports rose slightly for the first six months it was the second quarter where prices rose sharply averaging around $700 per ton.

Polief-PTA production and paraxylene purchases

PTA production at Blagoveshchensk totalled 145,000 tons in the first six months in 2021 against 116,000 tons in the same period in 2020.  Higher production of PTA at Polief has enabled its owning group SIBUR to export small volumes this year amounting to 5,800 tons in the first six months.  

Higher PTA production also meant that SIBUR was required to purchase 116,000 tons of paraxylene in the first half of 2021 against only 64,000 tons in the same period in 2020.  This meant that paraxylene costs for SIBUR rose to 5.8 billion roubles ($78.967 million) against 1.7 billion roubles ($23.145 million) in the first half of 2020, with prices higher in addition to higher volumes. 

Polief is still receiving criticism locally for the environmental damage caused by the release of effluents into the Izyak River in 2019.  This incident resulted in large volumes of fish being killed in addition to posing a risk to drinking water.  The management of SIBUR promised to compensate for the damage caused but it is alleged that SIBUR provided only minimal sums to cover the damage.  Despite the controversy residents of Blagoveshchensk, where the PTA plant is located, have recently been noticing improvements in the environmental situation.  The company is developing a project for the production of green PET granules, which will contain up to 25% of recyclables (plastic bottles).  Moreover, the company recently began construction of its own solar power plant, designed to reduce the carbon footprint from production. 

Tatneft’s PTA project and Ekopet

Tatneft’s subsidiary Ekopet imported 91,600 tons of PTA in the first six months in 2021 against 90,300 tons in the same period last year.  Costs for PTA purchases amounted to $53 million for PTA purchases in the first half year, and these costs make it difficult for the plant to avoid incurring debts. 

As the new owners of Ekopet (as from 22 June 2021) Tatneft is looking to construct a PTA plant at Nizhnekamsk adjacent to the pending paraxylene plant which is under construction at the Taneko refinery.  Shipping paraxylene to Kaliningrad for PTA production had been contemplated but has been discounted for technical reasons.  Ekopet’s dependency on imported PTA and MEG has made production unprofitable at the site and therefore an ultimate goal of Tatneft is to complete the full chain of production. 

Ekopet-MEG imports Jan-Jun 21

Regarding MEG Ekopet imports nearly all of its requirements from SABIC in Saudi Arabia.  Tatneft could potentially source MEG from Nizhnekamskneftekhim, but it is economically more profitable to buy cheaper MEG abroad.  Ekopet accounted for almost all of the 36,200 tons of MEG imported into Russia in the first half of this year. 

Russian PET trade Jan-Jun 2021

PET imports into Russia amounted to 118,900 tons in the first half in 2021, compared to 94,400 tons last year with China acting as the dominant supplier.  Exports of PET from Russia amounted to 16,000 tons in the first six months, up from 6,671 tons.  Ekopet accounted for 84.6% of exports this year. 

Titan-Polymer, Pskov

Titan-Polymer expects to start production at its new PET plant at Pskov in western Russia in the fourth 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 demand is met mostly by imports. 

Russian benzene production totalled 663,400 tons in the first six months in 2021 versus 722,000 tons in the same period in 2020.  Nizhnekamskneftekhim produced 151,700 tons against 152,100 tons whilst Gazprom neftekhim Salavat reduced production from 111,800 tons to 105,900 tons.  Reductions were reported by a number of producers, the largest of which was Gazprom Neft at the Omsk refinery dropping from 63,700 to 53,500 tons. 

Sales of benzene on the domestic market, including imports, amounted to 369,400 tons versus 394,400 tons in the same six months in 2020.  A number of factors contributed to the lower sales volumes on the domestic market this year including plant outages and increased internal processing.

SIBUR-Kstovo reduced sales from 44,500 tons in the first six months in January to June 2020 to 41,900 tons in the same period in 2021, whilst Stavrolen at Budyennovsk did not produce benzene in the first six months in 2021 after shipping 24,000 tons in January to June last year. 

Regarding import activity, the Atyrau refinery in Kazakhstan reduced benzene sales on the Russian market to 3,100 tons in the first six months in 2021 against 20,200 tons in the same period in 2020.  The Atyrau refinery encountered technical problems in the first quarter which has since restricted exports of benzene and paraxylene.  The Belarussian refineries increased deliveries to the Russian market to 15,000 tons in the first six months in 2021 against 2,900 tons in January to June 2020 whilst from Ukraine Karpatneftekhim increased shipments from 1,500 tons to 7,100 tons. 

Regarding caprolactam producers Kuibyshevazot reduced benzene purchases from 95,000 tons to 77,400 tons in January to June this year whilst Azot at Kemerovo increased purchases from 52,500 tons to 72,400 tons.  Shchekinoazot reduced purchases from 44,500 tons to 38,200 tons. 

For the production of cumene Kazanorgsintez purchased 34,600 tons of benzene in January to June 2021, versus 35,600 tons in the same period in 2020.  Kazanorgsintez buys benzene from a range of suppliers including Nizhnekamskneftekhim.  Other phenol producers saw Omsk Kaucuk reducing purchases from 23,400 tons to 12,400 tons and Novokuibyshevsk Petrochemical reducing from 25,500 tons to 19,900 tons.  In the styrene sector SIBUR-Khimprom at Perm purchased 51,900 tons of benzene in January-June 2021 against 51,100 tons in the same period in 2020. 

For producers, the Angarsk Polymer Plant undertook an outage in July whilst Gazprom neftekhim Salavat started its own outage in the second half of the month which affected merchant market sales.  For consumers, the Novokuibyshevsk Petrochemical Company resumed processing benzene in July after the completion of repairs at the phenol and acetone plant.  Due to short supply Kazanorgsintez was looking for additional volumes of benzene in July after only purchasing 3,300 tons in June. 

Despite the Paramax unit (with a capacity of 133,000 tpa of benzene) at the Atyrau refinery in Kazakhstan was said to be idle until the end of 2021, the refinery found a technical opportunity to release the product at the reforming unit. Benzene supplies from Kazakhstan resumed at the end of June. Other useful supplies in July included the Novolipetsk Metallurgical Combine which signed a contract with Kuibyshevazot for the supply of 1,000 tons of product per month until March 2022.

Russian caprolactam production, Jan-Jun 2021

Russian caprolactam production amounted to 193,200 tons in January to June 2021 against 185,600 tons in the same period in 2020.  Kuibyshevazot reduced caprolactam production from 99,700 tons to 97,600 tons whilst SDS Azot at Kemerovo increased production from 56,600 tons to 66,800 tons.  In August, repair work was carried out at two caprolactam plants.  This included Shchekinoazot whereby production was stopped on 15 August for eight or ten days.  At the Kemerovo Azot, repair work lasted from 1 August to 20 August.

Russian orthoxylene & toluene market, Jan-Jun 2021

Orthoxylene domestic sales on the Russian market rose in the first six months in 2021 to 96,600 tons from 79,300 tons in the same period in 2020.  Gazprom Neft increased shipments to 53,400 tons against 40,100 tons in the same period in 2020 whilst Ufaneftekhim reduced sales from 35,800 tons to 24,700 tons.  Kirishinefteorgsintez increased domestic sales from 3,400 tons to 18,400 tons in January to June 2021. 

The main reason for increased domestic sales this year has been the rise in phthalic anhydride production.  Kamteks-Khimprom increased production to 47,900 tons from 37,3000 tons whilst Gazprom neftekhim Salavat increased production from 4,800 tons to 6,400 tons.  In addition, the Roshalsky Plasticizer Plant started the production of phthalic anhydride in 2021, producing 4.400 tons in the first six months. 

Russian toluene production dropped from 150,400 tons in the first six months in 2020 to 130,800 tons in the same period in 2021.  Gazprom Neft at the Omsk refinery reduced production from 41,500 tons to 32,500 tons whilst Ufaneftekhim reduced production from 21,000 tons to 7,300 tons. 

Toluene sales on the domestic merchant market rose from 65,300 tons in the first half of 2020 to 69,900 tons in the same period in 2021.  The two largest suppliers included Gazprom Neft which shipped 26,300 tons against 19,800 tons last year and Lukoil-Perm which shipped 20,600 tons versus 13,500 tons. 

Russian phenol market, Jan-Jun 2021

Russian phenol production amounted to 127,700 tons in the first six months in 2021 against 126,600 tons in the same period in 2020.  Novokuibyshevsk Petrochemical produced 30,900 tons of phenol against 36,100 tons in the same period om 2020 whilst Ufaorgsintez increased production from 32,000 tons to

38,300 tons.  Kazanorgsintez increased production from 40,400 tons to 42,600 tons.  Omsk Kaucuk has been forced this year to reduce production due to technical problems, dropping from 20,100 tons to 15,900 tons. 

Kazanorgsintez consumes nearly all phenol in the production of Bisphenol A leaving the other three producers to serve the merchant market in Russia.  Sales of phenol totalled 67,500 tons in the first half this year against 61,100 tons in the same period in 2020 with Ufaorgsintez increasing shipments from 18,000 tons to 31,300 tons.  Omsk Kaucuk reduced shipments from 13,100 tons to 12,900 tons due to technical problems whilst Novokuibyshevsk Petrochemical reduced sales from 29,800 tons to 23,300 tons. 

Supply on the merchant market has been tightened by outages and increased captive consumption at Omsk Kaucuk.  Novokuibyshevsk Petrochemical undertook maintenance work at the phenol and acetone for most of June.  From 2 August to 25 August phenol production at Kazanorgsintez was stopped for maintenance whilst Omsk Kaucuk is hoping to return to full production in the third quarter but is facing challenges at present to comply with domestic safety regulations.  Ufaorgsintez may have needed to reduce capacity utilization in August due to the suspension of benzene production at Ufaneftekhim. It is expected that Ufaorgsintez will receive aromatic raw materials from other Rosneft plants.

Kuibyshevazot Jan-Jun 2021

Kuibyshevazot achieved a net profit of 7.4 billion roubles ($100.8 million) in the first half of 2021 which is more than 4 times higher than in the same period last year.  The increase was achieved due to an increase in the volume of production of marketable products, the restoration of market conditions and demand after the fall in 2020 due to the coronavirus pandemic COVID-19.  The volume of sales of marketable products of Kuibyshevazot for the six months of 2021 amounted to 35.9 billion roubles ($488.8 million), which is 51% more than in the same period in 2020.  The production of ammonia increased by 2.1%, to 555,500 tons, ammonium sulphate by 6.4% to 261,300 tons, and caprolactam by 4.2% to 103,900 tons.  The production of polyamide-6 increased by 25.4%, to 88,400 tons.   

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