CIREC-Russian paraxylene export data

PKN Orlen production Jan-Jul 2021

PKN Orlen hopes to produce olefins at near to full capacity for the remainder of 2021.  This would allow production of ethylene, propylene and butadiene to recover some of the volumes which were down in the first seven months.  Ethylene production dropped from 283,400 tons in the period January to July 2020 to 127,800 tons in the same period in 2021, whilst propylene fell from 258,700 tons to 143,000 tons and butadiene from 35,200 tons to 16,200 tons.  Phenol production at Plock was increased from 25,200 tons to 29,100 tons, although underwent a shutdown in mid-September lasting until mid-October. The production capacity of the phenol plant at Plock is 55,000 tpa and acetone is 34,000 tpa.  Orlen competes in the regional phenol and acetone market with Domo Caproleuna where capacities stand at 150,000 tpa of phenol and 93,000 tpa of acetone.  Domo Caproleuna has been facing propylene shortages in recent months. 

Polyethylene production at Plock dropped from 209,200 tons in January to July 2020 to 85,500 tons in the same period in 2021, whilst polypropylene dropped from 200,500 tons to 145,000 tons.  

In the Czech Republic, production of polyolefins at Litvinov has been stable this year.  HDPE exports were higher in the first six months compared to 2020 rising from 133,700 tons to 180,100 tons.    Orlen Unipetrol started its new PE3 unit at Litvinov in April 2020 replacing the older PE1 facility. 

Orlen Unipetrol cracker investment

Orlen Unipetrol has replaced the existing brown coal boiler room at Litvinov to ensure the operation of the ethylene unit.  The new gas boiler room involved investment of around Kc 1.2 billion (€47.3 billion).  The new equipment will help to cut dust emissions by around 50% and nitrogen oxide emissions by 70%.  Moreover, the new ethylene unit boiler room is equipped with two high-pressure oil-gas boilers which have about 3% more efficiency than the existing heating source.  The new technology enables Orlen Unipetrol to meet the requirements of Czech and EU air protection legislation, including tightened emission limits for large combustion plants which came into effect in August 2021.

This investment is part of Orlen Unipetrol’s strategy up to 2030 where the company aims to diversify its revenue sources and increase its competitiveness on the international market.  Unipetrol has identified an increase in petrochemical production as the main goal of the strategy in the current decade.   At the same time Orlen Unipetrol has put a strong emphasis on decarbonisation, increasing energy efficiency, recycling of plastics, the development of zero and low-carbon energy sources and advanced biofuels.

PKN Orlen & Orlen Unipetrol-recycling plastics

PKN Orlen has outlined plans to produce petrochemical and refinery products from plastic waste.  KBR will provide a feasibility study on how Orlen can utilise KBR’s licensed Hydro-PRTSM technology.  This technology involves the processing of waste plastics into liquid and gaseous products, which can then be processed in the production of chemicals, monomers and polymers.  In line with its strategy until 2030, PKN Orlen wants to develop a new area of its operations that will enable economically and environmentally efficient management of plastic waste. 

Orlen Unipetrol has already this year commissioned a pyrolytic testing unit for waste-plastics processing at Litvinov.  Orlen Unipetrol is exploring the possibilities of chemical plastic recycling and how it can utilise these feedstocks in the production process.  More than 400,000 tpa of plastic waste are produced in the Czech Republic of which only around 37% are used for recycling, and 18% are used as energy for heat and/or electricity generation.  Orlen Unipetrol has set an arbitrary target for plastics waste recycling that it will account for up to 15% of the group’s total plastics production by 2030.

PCC Rokita-PCC Exol investments and ethylene oxide usage

PCC Rokita and PCC Exol are attempting to secure extra supplies of ethylene oxide from PKN Orlen for further processing into surfactants.  PCC Exol is hoping to secure up to 120,000 tpa of ethylene oxide from Orlen at Plock, which is about 30,000 tpa higher than at present, after the current long-term contracts expire in 2023.   A new surfactant plant using ethylene oxide controlled by both PCC Rokita and PCC Exol is being considered for construction at Brzeg Dolny.   PCC Exol currently imports ethylene oxide to supplement domestic purchases.  In the first seven months in 2021 Poland imported 19,466 tons of ethylene oxide of which Germany and Russia were the main suppliers.

Polish propylene & butadiene imports, Jan-Jul 2021

Poland increased imports of propylene in the first seven months this year due largely to lower production at Plock.  Imports totalled 141,267 tons in the period January to July 2021 for a total cost of €118.937 million against 76,500 tons for €52.083 million.  Average prices for propylene imports rose from €638 per ton in January to July 2020 to €842 per ton in the same period this year.  Germany supplied 64,400 tons in the first seven months against 1,050 tons in the same period last year whilst imports from Ukraine dropped from 48,200 tons to 41,100 tons.  Russia increased shipments to 29,400 tons from 12,300 tons.  

Poland increased imports of butadiene in the first seven months this year primarily due to lower production at Plock, rising from 55,900 tons to 75,800 tons in January to July 2021.  Supply sources are divided mostly between Austria, Germany and Hungary.

Polish PTA exports Jan-Jul 2021

PTA exports from Poland increased from 206,023 tons in the first seven months in 2020 to 245,512 tons in the same period this year.  Germany remained the main customer for Polish PTA, taking 209,600 tons in the first seven months.  Lithuania was the second largest destination for PTA export shipments, taking 18,200 tons whilst Belarus reduced purchases to 9,800 tons from 16,900 tons in the same period last year.   Average prices for Polish PTA exports in the first seven months this year amounted to $604.8 per ton. 

PKN Orlen started maintenance at the PTA plant at Wloclawek in September which is expected to last until October.  Part of the shutdown includes the launch of a pilot installation at Wloclawek, where new catalysts based will be tested at the PTA plant aimed at replacing palladium-based catalysts.  The goal is to produce a catalyst containing much less precious metal in order to reduce cost and increase the economic efficiency of PTA production.  

PTA imports into Poland in the first seven months this year totalled 32,150 tons against 13,700 tons in the same period in 2020.  The largest share of PTA imports this year came from the Netherlands.  In addition to rising PTA imports this year Poland has increased imports of paraxylene feedstocks from 9,496 tons to 43,000 tons.  The PX-PTA-PET chain in Poland is seeing growth at present with estimated consumption of PET rising 12% in the first half year to 411,200 tons. 

Orlen to create new hydrogen hub at Wloclawek

PKN Orlen and Anwil have concluded agreements with Prochem related to the strategy towards using hydrogen as a transport fuel.  The construction of the hydrogen hub is to take place at Wloclawek.  Poland produces around 420,000 tons of hydrogen per annum from fossil fuels.   In order that Poland achieves carbon neutrality by 2050 producers of hydrogen will need to convert to green routes to production which involves usage of renewables.

Synthos production Jan-Jul 2021

Synthos increased polystyrene production in Poland to 42,500 tons in the first seven months against 39,500 tons in the same period last year, whilst reducing EPS production slightly from 58,200 tons to 58.100 tons.  Synthos is currently preparing to launch a new production line in the Kraków Technology Park for InVento expandable polystyrene, as well as upgrading its existing production line.  

Synthos imported 60,900 tons of styrene monomer in the first seven months this year versus 84,000 tons in the same period in 2020.  Ethylbenzene imports increased from 42,100 tons to 77,300 tons.  Synthos at the Oswiecim complex produces 120,000 tpa of styrene and 105,000 tpa of foamed polystyrene. 

Synthos exported a total of 194,962 tons of synthetic rubber in the first seven months in 2021 for €278,904 million against imports of 200,896 tons for €330.770 million.  EBSR exports from Synthos amounted to 79,670 tons in January to July 2021 for a value of €109,761 million.   The main markets for EBSR from Synthos this year included India with 16,650 tons, Brazil with 10,979 tons and China 5,540 tons.

Higher gas prices for Central Euopean chemical producers

Rising gas prices represent the main challenge to Grupa Azoty’s fertiliser division as other fertiliser producers in the region such as Achema in Lithuania.  In the first half year Grupa Azoty saw the least successful performance amongst Polish chemical producers due mainly to the price of gas.  Nonetheless the group has been able to partially offset some of the higher gas costs in the rising prices of fertilisers, whilst also benefiting from increasing prices of key plastics for the group and the sharp rise in the prices of oxo alcohols.  Whilst chemical producers were able to report positive results in the first half of 2021 some of the end-use industries have found rising raw material costs difficult to pass on to end-users. 

Despite higher raw material costs Ciech has stated that all operating segments of the chemical group have improved their financial results compared to 2020.  The soda ash business is expected to improve by around 13% in 2021 whilst the foam business has also had a very good second quarter.  Ciech assumes that this year's EBITDA will be zl 700-735 million. Ciech Sarzyna increased its share of the plant protection market by more than 14% reaching 6%. The Polish largest producer of plant protection products recorded revenue increases in the first half of 2021.

Czech petrochemical trade, Jan-Jul 2021

Czech exports of ethylbenzene rose in the first seven months to 71,413 tons from 42,274 tons in the same period in 2020.  All the ethylbenzene was shipped from Kralupy to Oswiecim in Poland, all within the structures of the Synthos Group. 

Ethylene exports from the Czech Republic increased from 8,057 tons in the first seven months to 16,439 tons in the same period in 2020 whilst imports dropped from 3,150 tons to 3,134 tons.  Propylene imports dropped from 27,438 tons to 25,023 tons.  Czech imports of butadiene rose from 33,015 tons in the first seven months last year to 45,340 tons of which Germany supplied a total of 19,160 tons and Hungary 3,102 tons.

Central European methanol trade Jan-Jul 2021

Exports of acetic acid from Serbia declined from 45,400 tons in the first six months last year against 40,900 tons in the same period in 2021.  Methanol exports rose from 56,200 tons to 59,700 tons.  Both products are produced by MSK Kikinda in the north of the republic.

Czech imports of methanol amounted to 54,900 tons in the first seven months this year against 53,000 tons in the period January to July 2021.  Russia accounted for 33,500 tons in the first seven months, according to Czech statistics.   Prices per ton for methanol exports into the Czech Republic increased this year from €239 to €350. 

Imports of methanol into Poland totalled 409,800 tons in the first seven months against 422,090 tons in the same period last year.  Exports of methanol from Poland dropped to 111,800 tons in January to July 2021 against 127,400 tons last year.  Import prices of methanol averaged €285 per ton and export prices averaged €347 per ton.

Central European isocyanates Jan-Jul 2021

Polish TDI imports amounted to 46,302 tons in the first seven months this year against 48,300 tons in the corresponding period in 2020.  Although volumes were slightly down in 2021 costs rose from €64 million to €119.1 million. 

MDI imports into Poland in the first seven months totalled 100,774 tons of which Germany supplied 32,680 tons and Hungary 32,051 tons.  Czech MDI imports increased in the first seven months to 27,372 tons against 16,946 tons in the same period last year, with costs rising from €15.3 million to €41.5 million or in average prices rising from €1404 per ton to €2157.  Germany increased shipments to the Czech Republic from 6,148 tons in the first seven months last year to 10,173 tons in January to July 2021, whilst Belgium increased from 5,105 tons to 7,643 tons and Hungary increased from 1,676 tons to 5,148 tons.

Russian chemical production, Jan-Jul 2021

Russian chemical production rose 6.4% in the first seven months in 2021 over the same period in 2020, with the largest rise seen in the output of mineral fertilisers.  Ethylene production increased from 2.425 million tons in the first seven months last year to 2.631 million tons this year whilst propylene was unchanged at 1.804 million tons. 

The production of polymers increased to 6.371 million tons from 5.744 million tons in January to July 2020, including a rise in polyethylene production from 1.957 million tons to 2.048 million tons.  More than half of the olefin and polyolefin production in in Russia is undertaken by plants belonging to the SIBUR and TAIF groups which are now undertaking a large-scale merger. 

Russian plants produced 999,000 tons of synthetic rubber in the first seven months, which is 10.2% more than in the same period in 2020.  Rubber markets have improved in 2021 in terms of volume demand although margins remain tight.

In the base chemical sector Russian ammonia production stabilised at 11.7 million tons in the first seven months in 2021.  Caustic soda production amounted to 752,100 tons against 747,400 tons in 2020 whilst soda ash rose from 1.914 million tons to 1.947 million tons.   The main soda ash plants in Russia include Sterlitamak and Berezniki.

SIBUR-TAIF merger

The SIBUR-TAIF merger is expected to be completed on 30 September after obtaining permits, carry out corporate reorganisations, and further structuring of the transaction. Closing of the transaction is scheduled for September 30, and by now everything remains in force.  After that, SIBUR will become the largest shareholder of TAIF having received a controlling stake in the group consisting of petrochemical and energy enterprises.  In exchange, TAIF shareholders receive 15% of SIBUR Holding's shares and monetary compensation in one form or another. 

Kazanorgsintez and Nizhnekamskneftekhim are the main petrochemical assets belonging to the TAIF Group.  Combining the petrochemical plants of Tatarstan and SIBUR’s plants across the country creates an extremely strong chemical company in Russia, particularly in the area of petrochemicals.

TAIF petrochemical projects

The compressor plant for the EP-600 complex under construction at Nizhnekamskneftekhim was delivered in July, supplied by the cargo ship Oksky-56.  The deoxing air compressor plant arrived at the industrial port and jetty of Transkama which is located around 15 km from Nizhnekamsk.   The device was manufactured in South Korea and sent to Russia by sea across the Indian Ocean.  The installation includes two compressors which will be installed in the water preparation shop No.7209 EP-600.  The compressor plant will be the last batch of equipment delivered by water transport.   

Construction and installation work on the new olefin complex at Nizhnekamskneftekhim had achieved 20% of the product schedule by the end of August.  The EP-600 plant is scheduled to be completed in July 2023. 

Lummus Technology is acting as the main license supplier for Nizhnekamskneftekhim and recently concluded new contracts to supply new technologies for ethylbenzene, styrene, ethylene dimerisation, and olefins conversion units.  These plants are to be built as part of an expansion of an olefins production facility at Nizhnekamsk.  The units are planned to produce 250,000 tpa of ethylbenzene, 250,000 tpa of styrene via the Classic SM process, and 150,000 tpa of polymer-grade propylene via olefins metathesis chemistry.

The furnaces for the olefin complex at Nizhnekamsk consist of two radiant sections and one common conversion part.  Five of the high-performance furnaces will be operational with one kept in reserve.  The five furnaces will be capable of processing up to a total of 226 tons of naphtha per hour.  In addition to the 600,000 tpa of ethylene the new cracker will be able to produce 272,800 tpa of propylene.

Besides investments at Nizhnekamsk, Kazanorgsintez selected Maire Tecnimont as EP-contractor for a new LDPE/EVA production unit at Kazan with a capacity of 100,000 tpa.  The total preliminary value of the EP contract is €130 million.  The term of the project is approximately 40 months from the date of signing the contract.  The project of new production of LDPE/EVA is based on the technology developed by Sumitomo Chemical.

Gazprom helium hub

Gazprom has commissioned the world's largest logistics centre for servicing helium containers for the transportation of liquid helium from the Amur GPP to the world market. Helium is in demand in high-tech industries, the demand for it is growing, primarily in the countries of the Asia-Pacific region. 

The helium hub is located on the territory of the Nadezhdinskaya TOR in the Primorsky Territory near seaports.  The task of the hub is the maintenance of containers sent to the Amur GPP for filling, the organization of logistics, reception, weight control and preparation of isothermal containers arriving from the Amur GPP for the upcoming loading on sea vessels.

ZapSibNeftekhim-decarbonisation

The engineering company NIPIGas, as part of a joint venture with Technip Energies, will be engaged in the decarbonisation project outlined for ZapSibNeftekhim.  The total potential of the project to decarbonise the Tobolsk cluster is to reduce emissions by almost 4 million tons of CO2 equivalent.

Russian ethylene production, Jan-Jul 2021

Russian ethylene production totalled 2.631 million tons in the first seven months in 2021 against 2.425 million tons in the same period in 2020.  ZapSibNeftekhim produced 868,100 tons in January to July up from 614,300 tons from January to July 2020.  In the first seven months in 2021 Nizhnekamskneftekhim produced 378,300 tons of ethylene against 383,900 tons in the first seven months in 2020 whilst Kazanorgsintez dropped from 369,200 tons to 352,600 tons. 

Other important ethylene producers included SIBUR-Kstovo which produced 238,800 tons versus 217,100 tons.  Overall SIBUR’s group production increased from 1.035 million tons to 1.274 million tons.  In Bashkortostan Gazprom neftekhim Salavat produced 198,000 tons against 221,300 tons, whilst Ufaorgsintez reduced production from 76,200 tons to 46,400 tons.    

Regarding plant outages an unscheduled shutdown of one of the compressors of the Ethylene-100 unit at Kazanorgsintez occurred on 25 August, followed by a brief shutdown.  From 11 September to 1 October 2021, Nizhnekamskneftekhim's ethylene plant is undergoing a maintenance shutdown involving the production of ethylene, propylene, benzene and some derivatives. 

During this shutdown supplies on the Volga-Urals ethylene pipeline will be restricted, particularly for Kazanorgsintez where ethylene production is lower than for polyethylene.  As ethylene is expected to remain tight in the fourth quarter Kazanorgsintez will need to seek other supplies where available. 

Kazanorgsintez develops ethane-propane technology

Kazanorgsintez has developed a technology for the joint pyrolysis of ethane and propane.  Due to the new raw material mix, the company hopes to maximise capacity utilization and increase ethylene production.   Kazanorgsintez is the only company in Russia that uses ethane technology for the production of ethylene used for the production of various brands of polyethylene.  Suppliers of ethane for Kazanorgsintez are the Orenburg helium plant of Gazprom and the Minnibayevo associated gas processing plant which belongs to Tatneft.

Propane supplies are purchased by Kazanorgsintez mostly from Uralorgsintez and SIBUR-Novatek at Tobolsk, usually in volumes of 8-10,000 tons per month.  Other sources include Novokuibyshevsk Petrochemical Company and Tatneft.  The search for the optimal ratio of ethane and propane providing the greatest yield of ethylene with the maximum conversion of raw materials, was carried out by Kazanorgsintez. 

ZapSibNeftekhim’s production affected in August due to Gazprom accident

SIBUR Holding has been faced by feedstock issues at ZapSibNeftekhim in August and September due to the consequences of an accident that took place at Gazprom’s Novy Urengoy plant on 8 August.   SIBUR Holding estimates that it lost around 57,000 tons of gas liquids which restricted the production of LPGs.  SIBUR was forced to reorient part of its LPG exports to the Russian market to meet domestic demand.  The noticeable increase in LPG prices after the accident has since normalised.   In order to resolve the problems created by the Urengoy accident Novatek’s Purovsky plant (which supplies feedstocks to ZapSibNeftekhim) will receive about 85,000 tons of raw materials per month from Gazprom until November and in the future 40,000 tons per month until May 2022. 

SIBUR stated that the additional supply of raw materials from Novatek, as well as the unscheduled purchase of natural gas liquids from Gazprom's Astrakhan GPP, made it possible to avoid reducing production at ZapSibNeftekhim.  SIBUR hopes that the solution found by Novatek and Gazprom, and the prompt switching of raw material flows, will help balance the market and stabilise the provision of enterprises of the Russian petrochemical industry.

ZapSibNeftekhim produces 6.0 million tpa of LPGs in addition to 2.5 million tpa of polyethylene and polypropylene.  In the first half of 2021 ZapSibNeftekhim processed 4.291 million tons of NGLs.  Last year total NGL production in Russia amounted to 11.390 million tons, of which about 73% were delivered to ZapSibNeftekhim.  In January-June NGL production in Russia amounted to 5.717 million tons, of which 75% was sent to ZapSibNeftekhim. 

The main suppliers of NGLs to ZapSibNeftekhim are SIBUR's own GPP (48% of the total in 2020), Novatek's Purovsky ZPK (34%), Gazprom's Surgut ZSK (12%) and Surgut's Surgutneftegaz’ s Surgut PPG (6%).  NGL deliveries from Surgut to ZapSibNeftekhim were about 90,000 tons per month, which is about 10% of the processing at the plant.   SIBUR can compensate for the losses of NFLU Surgut ZSK supplies from its own GPP in Siberia, combined with the plant in Tobolsk by a single network of pipelines, as well as by reducing the supply of gas liquids to Uralorgsintez and SIBUR-Kstovo.

Russian propylene production, sales and exports, Jan-Jul 2021

Russian propylene production amounted to 1.803 million tons in the first seven months in 2021 against 1.533 tons in the same period in 2020.  The increase was due largely to the cumulative effect of the start-up of the plant at ZapSibNeftekhim at Tobolsk.  

The combined ZapSibNeftekhim and SIBUR Tobolsk plants increased production from 468,400 tons in the first seven months in 2020 to 731,000 tons in the same period in 2021.  Overall, the SIBUR Group production of propylene rose from 689,500 tons to 973,300 tons.   

In Tatarstan Nizhnekamskneftekhim produced 186,600 tons of propylene in the first seven months against 184,300 tons last year whilst Kazanorgsintez increased production from 27,600 tons to 29,500 tons. In Bashkortostan Gazprom neftekhim Salavat produced 72,900 tons of propylene against 95,900 tons whilst Ufaorgsintez reduced production from 112,500 tons to 101,400 tons.  In the Nizhny Novgorod region SIBUR-Kstovo increased production of propylene from 95,600 tons to 103,300 tons in January to July 2021, whilst due to maintenance Lukoil-NNOS reduced production from 136,300 tons to 132,300 tons. 

Russian sales of propylene on the domestic merchant market amounted to 182,200 tons in the first seven months in 2021 against 256,300 tons in the same period last year.  Production at ZapSibNeftekhim was consumed internally in the production of polypropylene.  The largest propylene supplier to the domestic market in the first seven months was Lukoil-NNOS, shipping 73,900 tons against 121,000 in January to July 2020 tons followed by SIBUR-Kstovo which fell from 84,400 tons to 78,500 tons.   

SIBUR-Tobolsk reduced merchant propylene purchases from 56,500 tons in January to July 2020 to 34,000 tons in the same period this year.  Saratovorgsintez reduced purchases of merchant propylene from 95,500 tons to 70,500 tons due to an extended maintenance outage between May and August.   Regarding other consumers, the Plant of Synthetic Alcohol at Orsk supplements propylene purchases for the production of isopropyl alcohol through the purchase of propane-propylene fractions. 

Lukoil resumed production of acrylonitrile at Saratovorgsintez in September after scheduled repairs.  The plant shut on 15 May and was intended initially to last two months, but the restart was delayed.  Saratovorgsintez has a capacity of 170,000 tpa for the production of acrylonitrile.   Aimed at adding new propylene outlets Lukoil began construction of a polypropylene complex at Kstovo on 22 July 2021 based on the refinery Lukoil-Nizhgorodnefteorgsynthesis (Lukoil-NNOS).  The complex will utilise propylene from two modernised catalytic cracking units which possess of total capacity of 4 million tpa.  After commissioning of the complex, the plant will be able to produce 500,000 tpa of polypropylene.  Commissioning is scheduled for 2025.  Lukoil is using Lummus Technology’s Novolen polypropylene production technology for the Kstovo plant. 

Propylene exports from Russia amounted to 82,500 tons in the first seven months against 37,700 tons in the first seven months in 2020.  Lukoil-NNOS increased export shipments from 31,500 tons to 49,800 tons whilst the Angarsk Polymer Plant shipped 17,700 tons against no activity in the same period last year.  Revenues from propylene exports jumped from $9.3 million in the first seven months to $18.3 million in January to July 2021.

Russian styrene production, sales and exports, Jan-Jul 2021

Russian styrene production increased from 423,200 tons in the first seven months in 2020 against 423,200 tons in January to July 2021.  Russian styrene exports amounted to 56,900 tons in first seven months in 2021 against 56,200 tons in the same period in 2020.  Gazprom neftekhim Salavat increased exports from 47,100 tons to 52,900 tons whilst SIBUR-Khimprom reduced export shipments from 5,400 tons to 600 tons. 

Domestic merchant sales of styrene rose from 64,100 tons in the first seven months in 2020 to 79,000 tons in the same period in 2021.  Increases were noted in merchant sales for Angarsk Polymer Plant, Gazprom neftekhim Salavat and SIBUR-Khimprom. 

The shortage of styrene on the Russian market widened in July due to the shutdown of Gazprom neftekhim Salavat for scheduled repairs which started in the second half of July lasting until 20 August.  SIBUR-Khimprom also started a shutdown in September compounding the shortages of available product on the market. 

SIBUR-Khimprom has extended the scheduled repairs at the styrene production facility after stopping on 9 August.  Gazprom neftekhim Salavat resumed styrene production after scheduled repairs, which were also extended by a week. The product was discontinued at the beginning of the third decade of July to the end of August.

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 where only a small amount of styrene is required.  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.

Russian polyethylene production and trade, Jan-Jul 2021

Polyethylene production of all grades in Russia totalled 2.048 million tons in the first seven months in 2021, up significantly from 1.418 million tons produced in the same period in 2021.  Exports of polyethylene moreover increased from 459,000 tons in January to July 2020 to 848,000 tons this year whilst imports dropped from 388,400 tons to 337,100 tons.  The main decrease in imports fell in the HDPE category where production has risen the most, whilst LLDPE imports were also affected.  HDPE imports dropped 29% in the first seven months to 118,200 tons whilst at the same time LDPE imports increased by 6% to 66,000 tons.  LLDPE imports dropped 15% to 89,600 tons.

Polyethylene prices this year have been much higher and Russian exports averaged $1085.2 per ton in the first seven months in 2021 against $782.8 per ton in the same period in 2020.  Excluding volumes to China, prices of Russian polyethylene exports in 2021 would have averaged $1357 per ton. 

Exports of polyethylene to China from Russia totalled 472,800 tons in the first seven months in 2021 for $411.1 million which meant an average price of $869.6 per ton which was heavily discounted against other destinations. 

The average price for Russian polyethylene exports to China amounted to $701.2 per ton based on 251,000 tons in volume and $176.0 million in value.  Most of the increase in Russian polyethylene exports in 2021 can be attributed to the ZapSibNeftekhim plant at Tobolsk which started production in 2020. 

Russian polypropylene production and trade, Jan-Jul 2021

The production of polypropylene at Russian plants increased in January-July to 1.2 million tons from 1.1 million tons in the same period in 2020. The production of polypropylene at increased by 150,300 tons to 659,200 tons, which was due to an increase in the capacity utilisation of the Tobolsk plant. 

Over the first seven months in 2021, imports of polypropylene into Russia increased by 19% compared to 2020 and increased to 145.400 tons against 122,000 tons.  Imports of homopolymers into Russia amounted to 54,500 tons against 51,100 tons whilst PP-block imports rose to 42,800 tons against 33,300 tons.  Imports of propylene stat copolymers amounted to 24,700 tons against 19,400 tons a year earlier.  External supplies of other propylene polymers amounted to 23,400 tons against 18,200 tons in January to July 2020. 

In contrast to polyethylene polypropylene exports from Russia to China have declined this year, dropping from 121,000 tons to 34,000 tons in the first seven months.   In total Russia exported 497,500 tons of polypropylene in the period January to July 2021 for $646.3 million against 398,000 tons in the same period in 2020 for $365.0 million.  Average prices rose from $917 to $1299 per ton.  Turkey has been the largest destination this year for Russian polyethylene exports taking 120,700 tons for $140 million followed by Poland which took 67,800 tons for $95.8 million.  Please contact us if you require more detailed data.

Russian paraxylene exports Jan-Jul 2021

Export shipments of Russian paraxylene totalled 53,300 tons in the first seven months in 2021 against 65,000 same period in 2020.  Exports have declined this year due to increase in PTA production at Polief and increased paraxylene purchases made by SIBUR.   Paraxylene export prices have been rising in line with higher feedstock costs and averaged $641 per ton in the first seven months against $529 per ton in January to July 2020. 

Polief-PTA production Jan-Jul 2021

Polief’s PTA production at Blagoveshchensk amounted to 175,000 tons in the first seven months in 2021, which was significantly higher than in 2020.  Polief purchases most of its paraxylene supply from Ufaneftekhim and small volumes occasionally from Gazprom Neft at Omsk.  Other raw materials required for PTA production are also sourced domestically.  MEG purchases of around 6,000 tons per month are made jointly from Nizhnekamskneftekhim and SIBUR-Neftekhim, whilst acetic acid is purchased from Russia’s sole producer Azot at Nevinnomyssk.  MEG supply in the Russian market became very tight in September, partly influenced by the European and US markets.  Another factor contributing to higher prices is the merger between SIBUR and TAIF which until now have been independent suppliers of MEG but now may be entering a monopolist position. 

Russian PTA imports, Jan-Jul 2021

PTA imports into Russia totalled 155,700 tons in the first seven months in 2021 against 177,600 tons in the same period in 2020.  China has also been the sole source of PTA imports so far in 2021, shipping 155,300 tons in the first seven months last year for $102.4 million from 177,600 tons for $106.2 million.  Average prices for PTA imports into Russia amounted to $644.8 per ton in January to July 2020 against $594.1 per ton in the same period in 2021.        

Ekopet at Kaliningrad accounted for 69.2% of Russian PTA imports over the first seven months in 2021, paying $62.2 million in value for 104,400 tons against $65 million in the same period last year for 110,100 tons.  PTA supply is much tighter this year due to scheduled shutdowns combined with revived demand and this has put upward pressure on pricing.  Chinese producers’ margins were squeezed in the second quarter due to mounting costs pressure from feedstocks. 

Ekopet-SafPet

The SafPet projects in Tatarstan, including PTA and PET, were considered to be dead prior to Tatneft’s purchase of Ekopet in June this year, although the PTA component from SafPet has become a target project.

SafPet was devised by the Tatarstan holding Ak Bars whereby construction was to begin construction in 2017 to start by 2020.  The plant design included 210,000 tpa of PTA and 250,000 tpa of PET.  After initial investments the project could not be implemented and drowned in courts with designers.  Notwithstanding the failed project Tatneft has continued to work on its aromatic complex at Taneko for 714,000 tpa to be launched in 2021-2022, where it is planned to allocate its own paraxylene.  Tatneft faces choices of whether to export paraxylene or alternatively seek an outlet for adding value and thus has opted for the latter. 

A number of factors contributed to Tatneft deciding to purchase Ekopet which it completed in June for 6.45 billion roubles.  In principle, the asset will allow Tatneft to fill the missing link in the chain from the producer of raw materials to the final consumer, as well as to use the Kaliningrad site for the further development for petrochemicals. 

The weakness of the Kaliningrad PET plant essentially relates its operational activity based on its raw material purchases and finished product sales.  In essence the Kaliningrad plant is only an assembly plant, where PET is produced from ethylene glycol and PTA as a result of one chemical process.  Both ethylene glycol and PTA have to be bought from foreign partners, MEG from Saudi Arabia and PTA from China.  This year MEG costs have risen due to oil prices and the impact on petrochemicals, and therefore Ekopet outlaid $34.2 million in the first seven months against $18.8 million in the same period last year.  Volumes increased from 39,800 tons to 44,200 tons, with average prices rising from $473 per ton in 2020 to $774 this year.

Around 80% of PET production by Ekopet is sold on the Russian market.  Buying raw materials based on either the dollar or the euro and selling mostly for roubles is almost designed to be unprofitable.  Subsequently Ekopet has reported losses in recent years. 

Tatneft is unable to change this scenario in the short to medium term, apart from possibly trying to diversify PET sales into other markets besides the Russian domestic market.  The raw material gap is very difficult to resolve in that MEG imports will have to continue regardless, whilst plans to construct a PTA plant could take five or six years to complete.  Tatneft not only has to establish the production of paraxylene, but also to build from scratch the production of PTA. 

Even if a PTA plant is constructed in Tatarstan, as intended by Tatneft, it will need to transport PTA across Russia and then through the territory of two other countries Belarus and Lithuania.  Under the current sales strategy Tatneft would then need to take back the PET to Russia.  Apart from expensive logistics and custom duties, there could be risks associated with crossing the two borders of states where Russia’s foreign policy may be influential.  In the short to medium term paraxylene production at the Taneko plant is forecast to start in 2022 or 2023, Tatneft either export or sell to Polief.

Russian PET recycling update

Still only around 150,000 tpa of PET bottles are processed in Russia measured against annual consumption around 700,000 tpa and thus improving waste collection represents a slow process.  Polief aims to start producing granular PET using recycled materials by the second quarter of 2022, but the company is only intending to use about 34,000 tpa of recycled materials.  Another project in Bashkortostan involves a company called Bioflex which plans to build a plant at Blagoveshchensk for the processing of secondary PET bottles and the production of flex (pieces of plastic suitable for use in food packaging).  The processing capacity of secondary PET bottles at the plant will be up to 13,000 tpa.  In Tatarstan Rosatom Greenway (part of Rosatom) plans to build a production complex at Naberezhnye Chelny worth 400 million roubles for the processing of PET waste into PET flakes of food quality. 

In the second half of 2022, a polymer processing plant with a capacity of up to 43,000 tpa finished products per year will be launched by a company called RT-Invest in the Moscow region.  The combination in a full cycle in a single location of sorting and processing of recyclables will optimize logistics.  The enterprise will consist of four clusters which comprises a bottle PET processing complex. A complex of processing of hard plastics, and lines for processing of film plastics, bags, as well as a mix of films and bags.

Russian benzene production Jan-Jul 2021

Russian benzene production amounted to 755,600 in the period January to July 2021 against 812,100 tons in the same period in 2020.  Nizhnekamskneftekhim increased benzene production from 177,100 tons to 178,000 tons, whilst Gazprom neftekhim Salavat reduced production from 125,300 tons to 112,800 tons. 

Russian have been pushed towards purchases abroad in recent months due to a shortage of product in the domestic market, due largely to repairs at domestic plants.  Russian converters will continue to import benzene from Belarus and Ukraine, although the position in Belarus could become complicated by sanctions.  Deliveries of benzene from Kazakhstan are restricted for the rest of the year as the Atyrau refinery will operate in a fuel mode.

Rosneft postponed the deadline for stopping benzene production at Ufaneftekhim due to the need for uninterrupted supply of raw materials for the production of phenol and acetone at Ufaorgsintez.

SIBUR-Kstovo increased shipments to the merchant market from 47,600 tons in January to July 2020 to 50,300 tons in the same period in 2021, whilst Gazprom Neft at Omsk increased shipments slightly from 45,800 tons to 50,800 tons. 

The shortage of benzene on the Russian market started to ease due to the resumption of production at the Angarsk Polymer Plant and the completion of repairs at several refineries. Furthermore, Kazanorgsintez stopped phenol production from 2 August to 25 August, helping the supply side.   Kazanorgsintez purchased 39,000 tons of phenol in the period January to July 2021.  Also, in August repair work started at two of the three caprolactam plants. At Shchekinoazot, production of the product was stopped on 15 August for 10 days, whilst Azot at Kemerovo stopped production from 1 August to 20 August. 

In other derivative areas the production of ethylbenzene and styrene was stopped at SIBUR-Khimprom in August which reduced demand for merchant benzene.

The largest merchant consumer in Russia Kuibyshevazot reduced benzene purchases from 100,900 tons to 85,700 tons in the first seven months whilst Azot at Kemerovo increased purchases to 79,900 tons from 61,500 tons.  For the production of cumene Kazanorgsintez purchased a total of 39,000 tons of benzene in January to July 2021, versus 40,500 tons in the same period in 2020, whilst Omsk Kaucuk reduced purchases from 23,800 tons to 15,400 tons.

Russian caprolactam production, Jan-Jul 2021

Russian caprolactam production amounted to 224,300 tons in January to July 2021 against 213,800 tons in the same period in 2020.  Kuibyshevazot reduced production from 115,400 tons to 111,900 tons whilst SDS Azot at Kemerovo increased production to 64,400 tons from 77,500 tons.   Both Azot Kemerovo and Shchekinoazot undertook scheduled maintenance outages in August.

Russian orthoxylene market, Jan-Jul 2021

Orthoxylene domestic sales in Russia amounted to 110,700 tons in the first seven months in 2021 against 95,900 tons in the same period in 2020.  Gazprom Neft increased domestic shipments from 48,900 tons to 61,400 tons whilst Ufaneftekhim reduced shipments from 40,200 tons to 28,500 tons. Kirishinefteorgsintez increased domestic shipments of orthoxylene from 6,800 tons to 20,700 tons.  Sales of orthoxylene for the production of phthalic anhydride totalled 59,500 tons in the first seven months in 2021 against 39,300 tons in the same period in 2020.  The newest producer Roshalsky Plasticizer Plant purchased 4,900 tons whilst the largest producer Kamteks-Khimprom increased purchases from 34,300 tons to 48,100 tons. 

Russian phenol market, Jan-Jul 2021

Russian phenol production amounted to 152,800 tons in the first seven months in 2021 against 146,800 tons in the same period in   2020.Novokuibyshevsk Petrochemical produced 37,100 tons of phenol against 39,600 tons whilst Ufaorgsintez increased production from 38,100 tons to 44,600 tons.  Kazanorgsintez increased slightly from 47,300 tons to 50,300 tons.  Omsk Kaucuk reduced production from 22,100 tons in the first seven months in 2020 to 20,800 tons in 2021. 

Phenol production at Ufaorgsintez has not been stopped during the shutdown of Ufaneftekhim meaning that benzene is being sourced from other Rosneft plants, while the utilisation of phenol production facilities at the Ufa plant may decrease.  Elsewhere in the phenol sector Novokuybyshevsk Petrochemical Company resumed phenol production after maintenance.  

Sales of phenol on the Russian domestic market amounted to 80,300 tons in the first seven months in 2021, up from 61,100 tons.  Omsk Kaucuk supplied 16,300 tons to the domestic market, Ufaorgsintez supplied 36,100 tons and Novokuibyshevsk Petrochemical 23,300 tons.  Exports of phenol amounted to 15,000 tons in the first seven months against 21,400 tons in January to July 2020. 

Kazanorgsintez began repair work in August at the phenol and acetone production facilities.  In parallel, the enterprise will carry out repairs on the line for the production of bisphenol-A and polycarbonates. The production capacity of phenol and acetone at Kazanorgsintez is 70,000 tpa and 44,500 tpa.

Russian rubber production and consumption Jan-Jul 2021

Russian production of synthetic rubbers amounted to 999,000 tons in January to July 2021 against 861,000 tons in the same period in 2020.  Exports rose from 521,100 tons to 648,400 tons whilst imports rose from 112,000 tons to 134,000 tons.  Export prices of Russian synthetic rubber averaged $1586 per ton in the first seven months versus $1357 per ton in the same period in 2020. 

The Russian bill on the reverse excise tax on synthetic rubber could be ready by October and submitted to the State Duma before the end of this year.  This might involve tying he spread of quotations for rubber and raw materials used for the production of rubber.  The Ministry of Finance proposed amendments to the Tax Code of the Russian Federation, in which it proposed to introduce a reverse excise tax on synthetic rubber in the amount of 3.660 roubles per ton from January 2022. 

Russian synthetic rubber exports Jan-Jul 2021

Russian exports of synthetic rubber totalled 648,400 tons in the first seven months in 2021 against 521,100 tons in the same period in 2020.  The increase in exports equates to the rise in production in 2021.

Polybutadiene and isoprene exports showed large increases in volume, rising from 85,600 tons to 108,000 tons and from 113,300 tons to 156,500 tons respectively.  Exports of butyl rubber and halogenated rubber increased in the first seven months, with butyl exports helped by increased production at Togliattikaucuk.  Overall, synthetic rubber export prices increased in 2021 from $1459 per ton in January to $1959 per ton in July.   

China bought 96,300 tons of synthetic rubber in January to July 2021 against 122,400 tons in January to July 2020 whilst Poland imported 68,500 tons against 47,100 tons.  India took 60,400 tons of synthetic rubber from Russia in the first seven months this year, rising from 56,200 tons in 2020.  Other large buyers included Turkey which increased purchases from 33,600 tons to 56,400 tons.

Nizhnekamskneftekhim rubber exports Jan-Jul 2021

Nizhnekamskneftekhim exported 346,900 tons of synthetic rubber in the first seven months in 2021, up from 291,900 tons in the same period in 2020.  Exports of halogenated butyl rubber increased from 64,100 tons to 75,900 tons with revenues rising from $110.0 million tons to 161.1 million.  Revenues from isoprene rubber and polybutadiene exports rose from $90.7 million to $139.7 million and $120.0 million to $188.0 million respectively.   

Nizhnekamskneftekhim’s revenue from the sale of synthetic rubbers for the six months of 2021 increased to 39.418 billion roubles against 25.627 billion roubles for the same period in 2020.  Sales of plastics, increased to 43.337 billion roubles versus 23.037 billion roubles last year.

Nizhnekamskneftekhim has started producing a new brand of synthetic rubber SKD-777, and the first pilot batches were sent to leading foreign tyre companies for assessment.   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. SKD-777 can be attributed to the rubbers of special purpose, which can be used in the manufacture of high-speed tyres.

Togliattikaucuk-rubber exports, Jan-Jul 2021

Togliattikaucuk increased rubber exports from 47,600 tons in the first seven months in 2020 to 88,800 tons in the same period this year.  Butyl rubber exports from Togliattikaucuk rose from 26,000 tons to 41,000 tons and isoprene rubber exports rose from 2,200 tons to 12,600 tons.  Revenues from export shipments increased for the company from $45.5 million to $75.7 million.

Russian methanol production Jan-Jul 2021

Russia produced 2.564 million tons of methanol in the first seven months in 2021 against 2.660 million tons in same period in 2020.   Metafrax at Gubakha produced 738,200 tons of methanol against 728,300 tons in January-July 2020 whilst Sibmetakhim (Gazprom Methanol) at Tomsk increased production from 523,000 tons to 579,000 tons.  

Tomet produced its highest monthly volume in July for the whole of 2021, achieving 78,614 tons on its two operating lines.  Overall Tomet produced 311,600 tons of methanol in the first seven months in 2021 against 542,100 tons in the same period in 2020.  Arrangements are being made for Tomet to ship methanol by tanker in addition to railway wagons. 

Shchekinoazot achieved production volumes in the first seven months of 563,900 tons against 565,800 tons in January to July 2020.  Also, in the Tula Oblast Azot at Novomoskovsk increased production from 97,800 tons to 147,000 tons.  Ammoni in Tatarstan increased methanol production from 47,300 tons in the first seven months in 2020 to 72,600 tons for the same period in 2021.   The increase attributed mainly to the introduction of new owners.

Russian methanol plant shutdowns Q3-Q4 2021

Overall scheduled shutdowns in the third quarter have not affected domestic market sales or exports, helped by some extent by revived production by Tomet.  Shchekinoazot has not yet started its shutdown of the M-450 methanol plant which was originally scheduled for August but delayed to September or October.  From 4 July to 17 July repair work was carried out at the M-450/A-135 methanol and ammonia complex.  The third methanol plant for Shchekinoazot is close to launch according to company reports which would increase the capacity to 1.4 million tpa. 

Gazprom Methanol started a maintenance shutdown from 11 September which is expected to last until 21 October.  In the first seven months in 2021, methanol production at the Tomsk plant amounted to 579,000 tons which is 11% more than in the same period of 2020.  The production capacity of Gazprom Methanol is 900,000 tpa, having undergone expansion in 2017.

 Repair work at the Metafrax methanol plant lasted for around three weeks in August, having started on 2 August.  Ammoni at Mendeleevsk underwent a shutdown from 1 August to 15 August.  Due to shutdowns ongoing or completed both Metafrax and Gazprom Methanol hold little available stocks.  Gazprom Methanol was not selling merchant product either on the domestic or export markets in September.  Shchekinoazot is also faced by insufficient spot volumes of methanol. 

Russian methanol exports, Jan-Jul 2021

Reported producer export shipments of Russian methanol amounted to 1.111 million tons in the period January to July 2021 against 1.308 million tons in the same period in 2020.   The average ratio of exports as a share of production achieved 43% over the seven-month period in 2020.  Tomet reduced exports from 226,200 tons in the first seven months in 2020 to 102,300 tons this year.  Although volumes are down Tomet is regaining lost volumes since the start of the second line.  Declines reported by other producers by other producers were much smaller. 

Metafrax reduced exports from 321,300 tons in the first seven months in 2020 to 243,000 tons in the same period in 2020 whilst Gazprom Methanol (Sibmetakhim) increased exports from 292,500 tons to 306,400 tons. The largest Russian exporter was Shchekinoazot shipping 396,500 tons versus 428,100 tons in January to July 2020.

From customs reported data, exports totalled 1.152 million tons in the first seven months against 1.323 million tons in the same period in 2020.   Exports to Finland totalled 559,900 tons in the first seven months against 625,700 tons in the same period in 2020.   The largest exporter through the Finnish ports is Sibmetakhim (Gazprom Methanol) followed by Metafrax. 

Poland reduced shipments from Russia to 176,400 tons in January to July 2021 against 217,100 tons in the same period in 2020, whilst Slovakia increased volumes from 83,100 tons to 141,800 tons.  Romania reduced imports from Russia from 42,600 tons to 38,300 tons in January to July 2021. 

Russian methanol domestic sales, Jan-Jul 2021

Merchant sales of methanol on the Russian domestic market amounted to 936,100 tons in the first seven months in 2021 against 795,900 tons in the same period in 2020.  Despite operating one line for the most part in the first seven months Tomet’s sales from the Togliatti plant still amounted to 185,700 tons against 239,900 tons last year. 

Under its current administration management Tomet hopes to complete improve its delivery chain in September and October with access to tankers rather than just railway tanks.  This will enable the company to expand the sales market for Russian consumers whilst reducing costs and increasing the rate of profit.

Gazprom Methanol increased domestic shipments of methanol from 180,700 tons to 245,600 tons whilst Shchekinoazot increased domestic sales from 88,100 tons to 111,300 tons. 

Metafrax increased shipments to the domestic market from 185,700 tons to 239,900 tons.   Metafrax supplied 107,700 tons to Nizhnekamskneftekhim in the first seven months in order to support isoprene and formaldehyde production.  In the first seven months Metafrax produced 114,400 tons of urea-formaldehyde resins providing one of the internal processing outlets for methanol. 

Nizhnekamskneftekhim increased purchases of merchant methanol from 115,700 tons in January to July 2020 to 176,000 tons in the same period in 2021.  This rise was due to the increased production of formaldehyde and isoprene rubber at Nizhnekamsk.  Togliattikaucuk reduced methanol purchases from 87,100 tons in January to July 2020 to 72,400 tons due mainly to lower MTBE production. 

Gazprom increased purchases of methanol for gas hydrates in Siberia from 74,700 tons in the first seven months in 2020 to 117,500 tons in 2021.  Nearly all of the methanol purchases made by Gazprom come from its subsidiary Gazprom Methanol (Sibmetakhim). 

In the area pf urea-formaldehyde resins Kronospan and Metadynea recorded higher production volumes in the first seven months which led to higher methanol purchases.  Kronospan bought 72,300 tons in January to July 2021 against 5,500 tons last year and Metadynea increased purchases from 40,000 tons to 53,600 tons.  Uralkhimplast at Nizhniy Tagil increased methanol purchases from 11,100 tons to 13,900 tons. 

Uralkhimplast increased its net profit by 1.5 times compared to the same period last year, to 300.54 million roubles.  The company's revenue in the first half of the year also increased by 1.5 times, to 3.25 billion roubles, although the cost of production rose by 1.6 times to 2.47 billion roubles.  Gross profit thus increased to 776.4 million roubles against 650 million roubles a year earlier.

Metafrax methanol processing and product diversification

The strategy of Metafrax involves not only developing the methanol chain in order to reduce the dependency on export sales and the domestic merchant market but also to diversify its product range.  This year the company hopes to start up its third formaldehyde plant followed by the new paraformaldehyde plant (30,000 tpa) where Metafrax has started connecting the formaldehyde supply.  In the first seven months in 2021 Metafrax produced 737,800 tons of methanol of which 256,400 tons was exported and 236,500 tons sold on the merchant market.  The remaining 244,900 tons was processed internally.

In other product areas Metafrax has agreed together with the licensing company Casale SA to build a plant for 40,000 tpa of melamine at the production site at Gubakha.  This will add to the melamine plant of 40,000 tpa already close to completion and by 2025 the company’s capacity by 2025 will amount to 80,000 tpa.  The first melamine plant is part of the AKM complex which is expected to undertake commissioning in the near future.  The AKM complex includes capacities of 308,000 tpa of ammonia, 575,000 tpa of urea and 40,000 tpa of melamine. 

Metafrax, which is controlled by Seyfeddin Rustamov, recorded an improvement in financial performance in the first half of 2021.  Metalrax’s revenue increased to 14.7 billion roubles against 9.76 billion roubles in January to June 2020 whilst the gross profit increased from 4.57 billion roubles to 8.86 billion roubles and the net profit rose from 1.54 billion roubles to 6.39 billion roubles.  Exports of products in the second quarter accounted for 43.4% of total sales as opposed to 44.9% in the first quarter.

ESN Group can ship methanol using vessels based on methanol

A memorandum between the ESN group and the Japanese companies Marubeni and Mitsui has been formed whereby methanol from the Skovorodino plant (under construction) could be used as a bunker fuel in vessels.  Marubeni has proposed using methanol-based vessels as a means of shipping methanol itself from the ports of Primorsky Kray to Asian markets.  The parties are working on the construction of two or three dual-fuel vessels (on methanol and diesel fuel) with a deadweight of up to 50,000 tons. The first deadweight vessel project participants want to lay at the Russian shipyard in 2022 or 2023.

The methanol plant at Skovorodino is being built by Technolizing, which is part of the ESN group owned by Grigory Berezkin. The launch of the plant is scheduled for 2024 involving an initial capacity of 1 million tpa with an option to expand up to 2 million tpa.  Up to 500,000 tpa of this volume has already been contracted by Marubeni for a period of twenty years. The project possesses a number of ready-made logistics alternatives, including the transportation of products to China by pipeline and road transport.  

Moreover, the recent decision of the board of Russian Railways to provide a discount makes the delivery of methanol by rail economically expedient.  Natural gas from the Power of Siberia gas pipeline, which runs 15 km from the plant.  Some of the largest ship operators are moving from non-environmentally friendly fuels based on oil and petroleum products to a more environmentally friendly fuel methanol. Global operators such as Maersk and Stena have started to order the appropriate vessels as part the goals for decarbonisation.  Japanese corporations state that they will consider the possibility of supplying methanol produced by ESN as bunker fuel to the East Asian region with appropriate demand.  For the Skovorodino plant it means establishing guaranteed sales outlets with a long-term perspective. 

Russian butanol production Jan-Jul 2021

Russian normal butanol production totalled 76,300 tons in January to July 2021, against 72,900 tons in the same period in 2020.  Gazprom neftekhim Salavat was the largest Russian producer, increasing production to 35,700 tons against 34,000 tons in January to July 2020. 

Isobutanol production in Russia dropped from 56,600 tons to 47,800 tons in the first seven months in 2020 during which Gazprom neftekhim Salavat reduced production from 20,400 tons to 19,600 tons, and SIBUR-Khimprom reduced from 28,600 tons to 19,200 tons.  Angarsk Petrochemical Company stopped the production of butanols on 26 June for planned maintenance which finished by the end of July.

Russian domestic butanol sales, Jan-Jul 2021

Merchant butanol sales on the Russian domestic market dropped in the first seven months to 37,500 tons from 37,000 tons in January to July 2020.  Deliveries directly from Russian producers dropped to 33,400 tons in the first seven months, with the remainder made up by traders.  The largest supplier of butanols to the domestic merchant market in the first seven months came from Angarsk Petrochemical which shipped 16,200 tons against 14,800 tons in the same period in 2020.  Most of the butanols produced at Angarsk are currently sold on the merchant market despite the geographical distances from the customers. 

The largest butanol buyer on the domestic market in the first seven months in 2021 was Akrilat which took 11,500 tons against 11,400 tons in January-July 2020 followed by Dmitrievsky Chemical Plant increased purchases from 7,900 tons to 9,600 tons.  

Russian acetone market Jan-Jul 2021

Russian acetone production in the first seven months in 2021 amounted to 95,800 tons against 91,000 tons in the same period in 2020.  Omsk Kaucuk produced 12,900 tons of acetone against 12,800 tons in the same period in 2020 whilst Kazanorgsintez increased production from 29,800 tons to 31,900 tons.    Acetone exports from Russia totalled 25,200 tons in the first five months in 2021 against 26,360 tons in the same period in 2020. 

Revenues from Russian acetone exports rose from $14.2 million to $26.0 million after prices rose sharply this year.  The largest market for Russian acetone exports was the Netherlands taking 16,200 tons against 10,400 tons in the same period in 2020.

Russian TDI-MDI imports, Jan-Jul 2021

Russian TDI imports totalled to 33,985 tons in the first seven months in 2021 against 26,642 tons in the first same period in 2020.  Values of Russian TDI imports increased from a total of $52.425 million in January to July 2020 to $87.444 million in the same period in 2021.  The main Russian regions for TDI purchased imports included Moscow and Tatarstan.

China was the largest supplier of TDI to Russia in the first five months this year shipping 11,497 tons for $27.769 million which compares against 1,477 tons in January to July 2020 for $2.964 million.    

South Korea was the second largest supplier of TDI to Russia in the first seven months this year shipping 7,498 tons against 1,483 tons in January to July 2020. 

Other important suppliers included Hungary which shipped 4,799 tons to Russia against 6,000 tons in January to July 2020 and the US which exported 3,191 tons against 1,100 tons in the first seven months in 2020.  TDI supplies from Germany and Saudi Arabia both declined this year.

MDI imports into Russia amounted to 104,630 tons in the first seven months in 2021 against 80,935 tons in the same period last year, with costs rising from $88.652 million to $242.777 million.  Saudi Arabia lowered shipments in the first seven months from 24,828 tons last year to 21,605 tons whilst shipments from the Netherlands rose from 15,569 tons to 22,265 tons.

Other MDI suppliers included China which increased shipments from 18,051 tons in January to July 2020 to 25,612 tons in 2021 and Germany which increased from 11,095 tons to 11,855 tons.   Belgium increased shipments from 8,016 tons to 12,161 tons.

The most important region for Russian MDI imports was the Vladimir Oblast which accounted for purchases of 40,673 tons in the first seven months this year for $82.777 million.  The next largest regions included Moscow where volumes amounted to 21,357 tons for $59.595 million and the Kaluga Oblast which bought 14,544 tons for $26.863 million.  Tatarstan took 5.4% of purchases this year for $14.600 million. 

Russian isocyanate import costs Jan-Jul 2021

TDI costs for Russian importers averaged $2574 per ton in the first seven months against $1674 in the same period in 2020. 

MDI costs per ton for Russian imports rose from $1337 in the first seven months in 2020 to $2264 in the same period this year.  Whilst isocyanate costs have stablished over the summer months supply side disruptions have started to appear including the effects of Hurricane Ida which stopped BASF’s Geismar plant in Louisiana.  Thus, higher prices may be seen for both TDI and MDI in the fourth quarter.   

Ukrainian polymer trade Jan-Jul 2021

In the first seven months of 2021 polypropylene imports into the Ukrainian market amounted to 71,800 tons, 5% less than the 75,600 tons in the same period in 2020 when the total amounted to 47,700 tons.   Homopolymer imports into the Ukrainian market amounted to 52,500 tons in the first seven months, less than the 54,000 tons in the same period in 2020.   Block copolymer imports dropped from 7,100 tons to 6,900 tons and random copolymers rose from 8,300 tons to 9,300 tons. 

In the first seven months polyethylene imports into the Ukrainian market amounted to 145,200 tons, which is 9% lower than the 159,500 tons in the same period in 2020.   HDPE imports amounted to 47,700 tons against 61,000 tons for the same period in 2020.  LDPE imports dropped 7% to 43,800 tons, whilst LLDPE imports remained unchanged at 43,500 tons.  Imports of other types of polyethylene, including ethylene vinyl acetate (EVA) amounted to 10,200 tons against 7,800 tons a year earlier.

This year imports of PVC to the Ukrainian market decreased by 31% to 15,800 tons from 23,000 tons, while export sales of PVC increased by 11% to 116,400 tons from 105,000 tons in January to July 2020.

Karpatneftekhim-production and trade Jan-Jul 2021

Karpatneftekhim reduced exports of propylene in the first seven months in 2020 from 60,900 tons to 60,000 tons, whilst benzene exports rose from 38,000 tons to 49,800 tons.  The largest share of propylene shipments was exported to Poland.  Karpatneftekhim has encountered several stoppages this year due the high cost of raw materials combined with low prices for polyethylene.  In the first seven months in 2021 Karpatneftekhim produced 136,000 tons of ethylene, 62,300 tons of propylene and 53,800 tons of benzene.

Ukrainian plasticizer imports, Jan-Jul 2021

Ukraine increased imports of DOP from 1,139 tons in the first seven months in 2020 to 2,244 tons in the same period in 2021, whilst DOTP imports dropped from 2,280 tons to 1,068 tons and DINP dropped from 6,838 tons to 5,839 tons.  The largest suppliers of DOP and DOTP were from Poland, Boryszew and Grupa Azoty respectively whilst the largest suppliers of DINP included Exxon Mobil and Deza from the Czech Republic. 

Ukrainian methanol market Jan-Jul 2021

Ukrainian methanol imports totalled 57,700 tons in the first seven months in 2021 against 46,800 tons in the same period in 2020.  In addition to Russian producers Metafrax and Shchekinoazot, Centro Chem from Poland and Vivochem from the Netherlands have also provided supplies. 

For supplies of formalin, urea-formaldehyde concentrate and urea-formaldehyde resins, Ukraine imports from a number of countries including Poland, Belarus, Romania and Slovakia. 

Odessa Portside Plant stops production of gas derivatives

Odessa Portside Plant stopped production on 18 September after the price of gas exceeded $1000 per cubic metre.  Odessa Portside Plant which produces urea and ammonia buys gas through Odessagaz but has been unable to pay the market price.   The plant aims to restart on 1 November with gas supplied through a new contract with Dachex Shipping from Singapore.  This was the result of a tender in July 2021.  One argument for the rise in gas prices in Europe is that Gazprom has limited supplies through Ukraine and Poland and has begun to select gas from storage facilities to fulfill its contractual obligations.  Due to the restrictions on the transit of gas to European countries through the Ukrainian gas transportation system by Gazprom, Ukraine may be threatened by a gas shortage in the near future.

Uzbek polyethylene sales, Jan-Jul 2021

From January to July 2021 Uzbekistan sold 86,000 tons of polyethylene granules through exchange trading to the domestic market, which is 37% more than in the same period in 2020.   Sellers of polyethylene include the Shurtan Gas-Chemical Complex, Uz-Kor Gas Chemical and Uzbekneftegaz.  The volume of exports of polyethylene for this period amounted to 18,200 tons.   Regarding domestic sales in the period January to July 2021 the Tashkent region accounted for 51% of polyethylene consumption, followed by the Samarkand region with 15%, Fergana 9%, Namangan 6% and the Andijan region 5%.

Turkmenistan-polypropylene production Jan-Jul 2021

Production of polypropylene (PP) at the Turkmenbashi refinery amounted to 41,623 tons in January to July 2021 which exceeded the planned production volume by 4,302 tons.  The plant capacity is 100,000 tpa based on LNG feedstocks produced by the refinery. 

Turkmengaz-ammonia and methanol feasibility study

Turkmengaz is negotiating with Haldor Topsoe on the construction in Turkmenistan of a small-sized gas chemical plant for the production of ammonia and methanol from natural gas.  A draft memorandum of understanding between the parties had been prepared to undertake a feasibility study for this project.

SOCAR-methanol production Jan-Jul 2021

SOCAR Methanol in Azerbaijan reduced methanol production by 47.5% in the first seven months in 2021 to 150,100 tons.  As of 1 August, the company possesses 33,500 tons of finished products in the warehouse.  The plant resumed operations only in May after a major overhaul carried out from January 2021.  SOCAR Methanol has not yet resumed the export of methanol. 

Azerbaijan polyolefin exports Jan-Jul 2021

Azerbaijan exports of polypropylene in the first seven months amounted to $66.9 million in value, which is 43.3% more than in the same period in 2020.  Exports of polyethylene from Azerbaijan amounted to $59.2 million in the period January to July 2021, which is 2.1 times more than in 2020.  Overall, polyolefin export revenues amounted to $122.9 million in the first seven months in 2021 which was 63% higher than in the same period in 2020.

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