Russian base chemical and fertiliser production Jan-Jul 2023

Russian ammonia production totalled 9.9 million tons in January to July 2023 against 10.1 million tons in the same period in 2022 whilst caustic soda dropped from 747,000 tons to 710,100 tons.  Nitrogen fertiliser production totalled 7.299 million tons in the first seven months in 2023 against 5.034 million tons in the same period last year.  Soda ash production fell slightly, due to raw material disruptions in Crimea.  Crimean Soda is currently included in Russian statistics, even though legally Crimea is not recognised as Russian. 

Russian petrochemical production Jan-Jul 2023

Russian ethylene production amounted to 2.683 million tons in January to July 2023 from 2.574 million tons in the first seven months in 2022.  Propylene production rose from 1.661 million tons to 1.664 million tons and benzene rose from 688,000 tons to 772,000 tons.  In the organic chemical sector butanols rose from 138,100 tons to 162,000 tons, whilst methanol dropped from 2.646 million tons to 2.296 million tons.   Methanol production has been affected by the loss of European export markets. 

Russian rubber & polymer production Jan-Jul 2023

The production of plastics totalled 6.268 million tons in the first seven months this year against 6.117 million tons in the same period last year.   The production of polyethylene rose from 2.031 million tons to 2.117 million tons in the first seven months in 2023.  This market has been particularly helped by the increased consumption in pipe manufacture for water and gas pipelines.  Polyethylene is produced at eight plants in Russia, the largest of which is ZapSibNeftekhim at Tobolsk.  Domestic demand to some extent has replaced exports of polyethylene to European markets.

Polystyrene production amounted to 343,300 tons in January to July against 337,900 tons in the same period in 2022.  PVC is the bulk polymer which has seen the largest fall in production, declining from 604,500 tons in the first seven months in 2022 to 561,500 tons. 

The production of synthetic fibres decreased in January to July 2023 to 105,300 tons compared to 111,300 tons in the same period in January to July 2022.  Russian production of synthetic rubbers in primary forms amounted to 838,000 tons in the period January to July 2023 compared to 902,000 tons in January to July 2022. 

Transportation rules loosened for ammonia and methanol export shipments

The Russian Ministry of Industry and Trade has prepared amendments to the legislation allowing the placement of chemical, hazardous, toxic and explosive substances in the water protection zones of seaports.  This has been done to support projects for ammonia and methanol transshipment facilities in Russia.  Until 2022 there was no urgent need for new ports as historically transshipment went through Ukraine and the Baltic states.  The war has meant that alternative export capacities were required.

The changes, if implemented, will contribute to the development of port facilities and flexibility in transhipment of products with unconditional compliance with safety requirements.  Russia is the world's largest exporter of ammonia (4.4 million tons in 2021) but does not possess its own transshipment facilities.  The deficit became especially acute due to the closure of the Togliattiazot ammonia pipeline to Odessa on the very first day of Russia’s invasion in Ukraine on 24 February 2022. 

Togliattiazot is currently building a marine complex at Taman for the transhipment of ammonia, with facilities to ship up to 2 million tpa.  The first part of this complex could be launched by the end of 2023.  Other developments include terminal facilities for Evrokhim to transport 0.85 million tpa of ammonia at Ust-Luga, whilst large volumes of methanol could be transhipped at the Baltic Methanol terminal.

Metafrax renationalisation

Renationalisation of Metafrax was confirmed on 8 September after the failure of the appeal by the company’s legal shareholders.  Owners of many other companies are concerned over how far the actual revision of the results of privatization will go.  Chemical production near Gubakha started working in 1955 initially on equipment exported after the Second World War from the factories of the German concern IG Farbenindustrie.  In the mid-1980s, Europe's largest methanol plant with a capacity of 750,000 tpa was launched.

The argument put forward by the shareholders is that Metafrax is a far more technologically advanced company these after huge investments had been completed in the past fifteen years.  In fact, there is no comparison to the facilities purchased in the first wave of privatisation in the 1990s.

Renationalisation of Volzhsky Orgsintez

As expected, the Arbitration Court of the Volgograd Region in August approved the so-called renationalisation of Volzhsky Orgsintez.  Effectively the court process was simply a rubber-stamp procedure, activating the 100% takeover by the state from assets owned by shareholders with non-Russian residency and in particular Alexander Sobolevsky. 

One of the main reasons for the seizure of assets was that Volzhsky Orgsintez had frozen the production of aniline, “which is necessary for the military-industrial complex of the Russian Federation”.  

The irony is that Volzhsky Orgsintez was forced to stop aniline production after the ban on monomethylaniline was imposed by the Russian Ministry of Energy.  Consequently, the company was forced to close the aniline unit.

Russian ethylene production Jan-Jul 2023

Russian ethylene production increased from 2.574 million tons in the first seven months in 2022 to 2.683 million tons in the same period in 2023.  ZapSibNeftekhim increased production from 778,462 tons in January to July 2022 to 897,322 tons.  In Tatarstan Nizhnekamskneftekhim produced 381,562 tons of ethylene against 379,416 tons in 2022, whilst Kazanorgsintez reduced from 388,172 tons to 381,276 tons.   The advantages of joining the SIBUR group in 2021 have included the widening of raw material sources for both Nizhnekamskneftekhim and Kazanorgsintez. 

Nizhnekamskneftekhim started a routine maintenance shutdown in September which was expected to last three weeks.   During the shutdown, a major overhaul of the plant's flare system will be carried out to ensure subsequent smokeless burning of light blowouts. In addition, in order to improve the environmental friendliness of production, measures will be taken to improve the efficiency of the plant's local wastewater treatment plant, including cleaning, repair and technical re-equipment of individual units.

The production capacities of Nizhnekamskneftekhim include 617,000 tpa of ethylene, 250,000 tpa of butadiene, 300,000 tpa and 199,000 tpa of benzene.  Polyolefin capacities include 230,000 tpa of HDPE/LLDPE and 180,000 tpa of polypropylene. 

Other important ethylene producers included SIBUR-Kstovo which produced 147,500 tons versus 137,100 tons in January to July 2022.   In Bashkortostan Gazprom neftekhim Salavat reduced production slightly from 195,626 tons to 193,222 tons, whilst Ufaorgsintez raised production from 59,701 tons to 62,178 tons.  Stavrolen at Budyennovsk reduced ethylene production to 190,773 tons against 188,799 tons in the first seven months in 2022.

In Siberia the Angarsk Polymer Plant produced 106,019 tons of ethylene in the first seven months in 2023 versus 111,756 tons in the same period in 2022, whilst Tomskneftekhim reduced production to 161,760 tons from 175,646 tons.  Tomskneftekhim resumed the production of monomers in early September after routine maintenance which started in August.  

Russian propylene production Jan-Jul 2023

Russian propylene production changed slightly in the first seven months, amounting to 1.664 million tons against 1.661 million tons in 2022.  ZapSibNeftekhim at Tobolsk increased production from 509,524 tons in January to July 2022 to 608,875 tons in the same period in 2023. 

The next largest producer was Nizhnekamksneftekhim which increased production from 188,675 tons to 190,610 tons.  Lukoil reduced propylene production at its Kstovo refinery from 186,449 tons in the first seven months in 2022 to 141,727 tons in the same period this year.  Polyom at Omsk reduced propylene production from 113,009 tons in the first seven months in 2022 to 94,067 tons this year, whilst Tomskneftekhim reduced production from 91,383 tons to 88,073 tons.

Russian propylene exports & sales Jan-Jul 2023

Propylene exports from Russia amounted to 83,885 tons in the first seven months in 2022 against 36,829 tons in January to July 2023.  Due to the loss of European business Lukoil-NNOS reduced export shipments from 53,417 tons to 15,236 tons in January to July this year whilst SIBUR-Kstovo reduced shipments from 10,552 tons in 2022 to 483 tons.  While European markets have been gradually closed for Russian exporters and China has become the main market for Russian exports. 

Russian sales of propylene on the domestic merchant market amounted to 258,073 tons in the first seven months against 247,299 tons in the same period last year.  The largest propylene supplier to the domestic market was Lukoil-NNOS, shipping 134,422 tons against 105,405 tons in January to July 2022 followed by SIBUR-Kstovo which increased sales from 91,905 tons to 93,212 tons. 

Overall supply of propylene exceeds demand in the domestic market, despite the outage over the summer at Angarsk Polymer.   

Regarding merchant consumers, ZapSibNeftekhim purchased 45,916 tons of merchant propylene in January to July this year versus 74,020 tons in the same period in 2022, sourced mostly from other SIBUR plants. 

Saratovorgsintez increased purchases of merchant propylene in the first seven months to 81,054 tons from 78,192 tons in January to July 2022, mostly supplied by Lukoil from its Kstovo refinery and the remainder from Stavrolen.

Other consumers of merchant propylene in Russia include Akrilat which reduced purchases from 17,115 tons in the first seven months last year to 15,512 tons this year.  Akrilat uses propylene in the production of acrylic acid and acrylates.  SIBUR-Khimprom increased purchases in January to July 2023 to 23,986 tons from 14,867 tons last year.  Propylene is used by SIBUR-Khimprom in the production of oxo alcohols. 

Russian butadiene production Jan-Jul 2023

Russian butadiene production totalled 219,115 tons in the first seven months against 269,559 tons in the same period in 2022.  Only Omsk Kaucuk showed an increase over 2022, rising from 22,240 tons to 25,020 tons whilst the largest producer ZapSibNeftekhim reduced production from 158,318 tons to 129,866 tons.  Nizhnekamskneftekhim reduced production from 131,260 tons to 103,337 tons.  

Russian plastics production Jan-Jul 2023

Russian bulk plastics production amounted to 6.268 million tons in January to July this year against 6.117 million tons in the same period in 2022 and 6.371 million tons in 2021. 

Although the production of plastics increased to record levels in 2023, not all products have seen strong demand.   Polyethylene has been the leading product, whilst polyamide production has been affected by lower tyre consumption and also exports.  PVC production has been in particular affected lower construction in the domestic market. 

Polyethylene production amounted to 2.117 million tons in the first seven months, up from 2.031 million tons in the same period in 2022.  Despite mitigating the effects of sanctions across many segments.  SIBUR is attempting to fill parts of the market which previously depended on Western imports.  However, whilst sanctions have created opportunities for Russian companies to develop its own production to replace imported products, overall, the lack of trade with Europe provides major hurdles to long term growth.

The pipe sector remains the stimulus for polyethylene production and demand.  Last year pipe manufacture in Russia rose by 19.5% whilst this year growth of 15% is expected.  Gazprom's regional gasification programme was launched in 2021 and should be completed in 2025.  This is part of the housing and utilities modernisation programme, which has been given more impetus following the loss of Gazprom’s gas market share in Europe.   In addition to the public procurement of gas pipes, contracts for water pipes in 2022 are likely to affect their annual production in 2023 and 2024, and pipes for heat supply in 2024.

Since water supply refers to pressure systems where PE100 pipe grade polyethylene should be used (at least for the inner layer of multilayer pipes), further growth should be expected in this segment of polymer production.  Overall PE100 grades in Russia account for more than half of the total volume of raw materials. The second most popular polymer is polypropylene although the domestic pipe industry consumes more than three times less than PE100. 

In 2022, the pipe industry consumed 548,000 tons of PE100 which is 29.8% higher than a year earlier. Consumption of various grades of polypropylene increased by only 6%, to 170,000 tons.

After February 2022, European producers began to curtail the supply of polyethylene grades to Russia. Russian pipe manufacturers experienced an acute shortage of them until SIBUR ramped up production.  Currently, the production of 36 grades of polyethylene has been mastered by SIBUR, of which six are intended for the production of pipes, including three related to black, one to white and two new to colour.  In general, the new pipe grades are part of SIBUR’s attempts to fill parts of the market which previously depended on Western imports.  PE80 production previously took place at Stavrolen but stopped due to a fire some years ago.  Some businesses still try to use PE80 where possible as it cheaper than PE100, but generally it is quite difficult to source. 

Russian polyethylene trade Jan-Jul 2023

Russian polyethylene trade from China has varied sharply in the past eighteen months with both imports and exports changing in response to international sanctions.  Initially in 2022 Russian producers increased export activity in polyethylene shipments to China, rising to 83,000 tons in August last year but then gradually dropping for the rest of the year.  Volumes in 2023 have been more consistent and lower than in 2022.  Exports dropped from 213,153 tons in January to July last year to 125,496 tons, with values dropping from $176.160 million to $147.628 million.   Export grades from Russia to China comprise mostly HDPE and LDPE.

From more than 50,000 tons of polyethylene and its copolymers imported from China to Russia in the first half of 2023, almost 12,000 tons, or 24%, were produced by non-Chinese producers.

By contrast inward shipments of polyethylene from China into Russia increased by value in the first seven months to $89.9 million tons versus $39.3 million in 2022 and €19.5 million in 2021.   By volume imports totalled 63,214 tons in the first seven-month period in 2023 against 26,433 tons in the same period in 2022 and 14,279 tons in 2021.  The most expensive grades of polyethylene included ethylene-vinyl acetate and ethylene-hexene copolymers. 

Russian-Chinese polypropylene trade Jan-Jul 2023

Sinopec became the leading exporter of polyolefins to Russia in 2023, exporting 11,600 tons of PP in the first seven months in 2023.  In total China increased export sales of polypropylene to Russia to 36,315 tons in the first seven months against 12,974 tons in the same period in 2022.  Import costs increased from $27.564 million to $73.937 million. 

Exports of polypropylene from Russia to China amounted to 99,319 tons in the first seven months in 2023 against 18,114 tons in the same period in 2022. 

In 2022, polypropylene exports decreased by 12.4% under the influence of the ban on the import of Russian polypropylene to the EU countries. Deliveries to Poland and Ukraine, as well as to Vietnam, decreased the most in 2022. An increase in supplies to Turkey, China and Uzbekistan helped to avoid a more significant drop in exports.

SIBUR-construction of new PP plant at Tobolsk starts

In late August construction started for a new polypropylene plant at Tobolsk under the SIBUR subsidiary ZapSibNeftekhim for the production of polypropylene, which will become part of the already existing ZapSibNeftekhim complex.  The expansion project for SIBUR's Tobolsk production cluster involves the construction of a propane dehydrogenation unit with a capacity of 550,570 tpa and a polypropylene production unit of 500,000 tpa.  The project will increase the capacity of SIBUR's Tobolsk industrial site to produce polypropylene by one and a half times, up to 1.5 million tpa.

Russian PTA imports Jan-Jul 23

Russian PTA imports from China increased in the first seven months to 147,068 tons versus 126,912 tons in the same period last year but was lower than the 155,615 tons imported in January to July 2021.  This year values of imports amounted to $115.630 million in the first seven months against respectively $111.6 million in 2022 and $90.255 million in 2021. 

Nearly all of the PTA imports from China were shipped to Ekopet at Kaliningrad by rail.  PTA import prices averaged $786.2 in the first seven months this year, down from $879.3 in 2022 and up from $579.8 in 2021.

Russian PET trade Jan-Jul 23

In the first seven months Russian import values of PET from China amounted to $144.592 million against $143.836 million in January to July 2022 and $81.987 million in 2021.  By volume imports rose from 130,464 tons to 155,742 tons in January to July 2023.  Average prices dropped this year in line with lower feedstocks costs, amounting to $932.6 per ton against $1110.9 per ton in the first seven months last year.  However they were higher than the comparative period in 2021 when numbers amounted to $863.6 per ton.

Russian PET imports from China in the whole of 2022 amounted to a total of 238,000 tons, which is 34.7% more than in 2021.  As a result, the share of Chinese PET in total Russian imports increased from 84% to 95%.  Russia imported 194,260 tons of PET from China in 2021 for $194.690 million, whilst Import values rose to $296.478 million.

Polief-raw materials supply

Polief increased MEG purchases of MEG in the first seven months in 2023 to 38,100 tons versus 26,400 tons in the same period in 2022.  Nizhnekamskneftekhim is the main supplier to Polief, shipping 32,300 tons in the period January to July. 

Polief’s revenue amounted to 7.8 billion roubles in 2022 which is around $100 million at the current exchange rate, up from 6.5 billion roubles ($84 million) in 2021.  Due to higher costs the company’s net profit more than halved from 501.4 million roubles (46.468 million) in 2021 to 230.1 million roubles ($2.968 million) in 2022. 

The capacity of the plant at Blagoveshchensk is currently estimated at 374,000 tpa of PTA and 264,000 tpa of PET.   Following the introduction of recycling facilities Polief has become an example of a closed economy where the re-involvement of used plastic bottles in production and further circulation.   Polief produces a small surplus of PTA which is sent normally to SIBUR-PETF at Tver. 

Russian synthetic rubber production Jan-Jul 2023

Synthetic rubber production in Russia amounted to 838,000 tons in January to July 2023 against 902,000 tons in the same period in 2022.  May production volumes rebounded this year strongly to 146,000 tons, which amounts to an increase of 22.7% over the same period in 2022 and 12.9% higher than in May 2021.  However, production fell in June and July to 96,000 tons and 116,000 tons respectively.  Tyre manufacturing remains suppressed by weak demand and concerns over how many drivers will be able to purchase new winter tyres. 

Russian Chinese rubber trade Jan-Jul 2023

Overall Russian exports of synthetic rubber to China totalled $444.7 million in the period January to July 2023 against $287.7 million in 2022.  By volume Russian shipments amounted to 307,489 tons in the first seven months versus 163,886 tons last year.

By volume butyl rubber exports from Russia to China increased from 48,736 tons in January to July 2022 to 62,234 tons in the same period this year.  For rubber producers, as for all Russian companies, the reorientation to Asian markets is associated with logistical problems.  The capacity of Russian railways and Russian Far Eastern ports does not allow to quickly reorient all supplies to Asia.  In February this year Russian quotas were established for imports of synthetic rubber into the EU area consisting of a total of 562,973 tons to be completed by 30 June 2024 in addition to 752,475 tons of carbon black. 

Nizhnekamskneftekhims rubber caapcities 

Until Russia invaded Ukraine Nizhnekamskneftekhim sold nearly of its synthetic rubber exports in the European market, shared with other players.  Since the second half of 2022 the company has been redirecting exports largely to China.

Nizhnekamskneftekhim accounted for 41.6% of global isoprene rubber production in 2021, whilst accounting for 15.4% of butyl rubber in global terms and 5.8% of butadiene rubber.  Together with the acquisition of Nizhnekamskneftekhim in 2021, SIBUR is the largest producer of synthetic rubber in Europe but is largely excluded from European markets.  Before sanctions Nizhnekamskneftekhim sold rubber under long-term contracts to tyre manufacturers such as Goodyear, Michelin, Pirelli, Continental, Bridgestone, etc.  Most of these contracts came with zero margins or at a loss in order to fulfil the terms of supply, even if sales themselves brought decent revenue.  As a result, the total revenues for the company rose sharply even if total profitability only hovered around 10%. 

Nizhnekamskneftekhim had set a target of raising synthetic rubber capacity by 2025 to 1 million tpa, but due to external events such as the pandemic and now sanctions capacity remains around the current 800,000 tpa.  Rubbers have traditionally provided 35-40% of all proceeds for Nizhnekamskneftekhim and 80% of the company’s foreign exchange earnings.

Russian methanol production Jan-Jul 2023

Russia produced 2.296 million tons of methanol in the first seven months in 2023 against 2.646 million tons in the same period in 2022.  Gazprom Methanol and Metafrax were the only producers to increase output this year, rising from 421,940 tons in the period January to July 2022 to 439,200 tons and from 641,325 tons to 686,763 tons respectively.  Azot at Novomoskovsk showed the largest proportional fall from 130,855 tons to 9,320 tons, having not produced since January.  Other small producers all reported lower production numbers. 

Russia’s largest producer Shchekinoazot reduced production from 890,982 tons to 756,824 tons.  At Togliatti Tomet produced 236,030 tons of methanol in January to July 2023 versus 362,786 tons last year.  Ammoni in Tatarstan did not produce in July and for the first seven months reduced methanol production from 57,271 tons to 43,869 tons. 

Gazprom Methanol shutdown

Gazprom Methanol stopped for planned maintenance on 11 September.  Officially this was scheduled, but unofficially market concerns and lower prices helped the decision to undertake maintenance.  No precise restart date has yet been confirmed.  Irespective of the reasons, the company will take the opportunity to conduct key maintenance and repair of equipment, replacing process pipelines, and repairing thermal insulation and cover layer on pipelines and equipment. 

One of the planned tasks include the modernisation of the synthesis gas compressor turbine will be undertaken.  Other tasks include the modernisation of the water circulation cycle and replacement of switchboard equipment. During the repair, the catalysts for desulphurisation and methanol reforming, as well as methanol synthesis, will be replaced.  It is not clear how long the outage will last. 

Russian methanol exports Jan-Jul 2023

Russian methanol exports amounted to 997,968 tons in the first seven months in 2023 versus 1.236 million tons in the same period in 2022. 

Russian methanol exports to Belarus decreased to 96,410 tons in January to July 2023 against 137,751 tons in January to July 2022.  Exports to Kazakhstan in the first seven months in 2023 increased to 26,116 tons from 22,597 tons last year whilst more significantly shipments to Poland dropped from 253,359 tons to 126,002 tons. 

China’s imports from Russia were valued at $113.881 million for shipments in the first seven months.  In terms of product pricing Russian shipments to China have seen lower prices since the start of the second quarter, dropping to $231.6 per ton in June before recovering slightly to $243.9 in July.  These prices test profit margins for Russian producers which are facing much higher logistics costs to China than to European markets.  Much of advantage in lower gas prices is eroded in shipments to China through the costs of transport.

Shchekinoazot reduced exports from 662,600 tons to 408,000 tons whilst Metafrax Chemicals increased shipments from 246,800 tons to 254,800 tons this year.  By overall volumes Tomet exported only 52,700 tons of methanol in the first seven months this year versus 119,900 tons in the same period last year.  Gazprom Methanol increased exports slightly in the first seven months from 154,500 tons to 232,300 tons.  

A total of 268,771 tons of methanol was shipped to the EU in the first seven months of 2023 against 899,063 tons in the same period in 2022.  For the whole of last year Russian methanol exports to the EU totalled 1.494 million tons against 1.651 million tons in January to December 2021.   

Russian methanol domestic sales, Jan-Jul 2023

Domestic merchant market sales tended to stabilise in the second quarter and then weaken slightly towards the end of the quarter.  In March-April, the price per ton of methanol in Russia had increased but has now eased back, partly due to the cessation of exports to the EU which has freed up product.  In the first seven months in 2023 Tomet supplied 125,225 tons to the domestic merchant market against 164,782 tons in the same period in 2022.  The largest consumer for Tomet is Togliattiazot where methanol is used for the production of urea-formaldehyde concentrate. 

Gazprom Methanol reduced domestic shipments of methanol from 166,044 tons in January to July last year to 135,365 tons in January to July 2023.  Previously formaldehyde was produced by Gazprom Methanol, but the assets were sold in 2021. 

Metafrax Chemicals increased merchant shipments in the first seven months this year from 219,068 tons to 264,346 tons.  Formaldehyde production at Gubakha amounted to 461,923 tons in January to July 2023 versus 473,252 tons in the same seven months in 2022.  Metafrax reduced production from 214,129 tons to 167,896 tons whilst Akron reduced production from 87,462 tons to 74,273 tons.

Shchekinoazot increased domestic sales from 167,576 tons in the first seven months in 2022 to 224,078 tons in January to July 2023.  This partly offset the loss of export volumes.  Overall the company faces the largest challenges amongst the Russian producers having expanded its capacity to 1.45 million tpa in September 2021.  In order to develop internal processing Shchekinoazot is looking for a general contractor for the construction of the KMMF-110 unit, which comprises a concentrated low-methanol formalin with a capacity of 110,000 tpa.  The timing of the Shchekinoazot project remains uncertain though.

Russian butanol production Jan-Jul 2023

Russian normal butanol production rose from 54,729 tons in January to July last year to 72,326 tons in January to July 2023.  Gazprom neftekhim Salavat was the largest Russian producer, increasing production to 44,026 tons from 36,419 tons.

Isobutanol production in Russia increased from 64,628 tons to 75,219 tons in January to July 2023.  Gazprom neftekhim Salavat increased production from 18,976 tons to 24,162 tons, whilst SIBUR-Khimprom increased production from 32,879 tons to 38,027 tons.

Normal butanol exports rose from 7,688 tons in the first seven months last year to 15,522 tons in the same period this year, including an increase in shipments by Gazprom neftekhim Salavat from 2,465 tons to 7,758 tons.  

Isobutanol exports fell from 29,024 tons in January to July 2022 to 14,757 tons this year.  Gazprom neftekhim Salavat reduced shipments from 18,930 tons to 4,522 tons whilst SIBUR-Khimprom reduced shipments from 9,597 tons to 8,609 tons. 

Russian acetone production Jan-Jul 2023

Russian acetone production increased from 79,789 tons in the first seven months last year to 93,356 tons in the same period in 2023.  Omsk Kaucuk produced 21,724 tons of acetone against 17,402 tons whilst Kazanorgsintez produced 32,801 tons versus 27,157 tons.  Acetone has sanctioned by the EU, preventing Russian exports and new markets are being sought by producers.  Exports fell in the first seven months from 56,620 tons in the first seven months in 2022 to 6,118 tons in the same period this year. 

Russian plasticizer trade Jan-Jul 2023

Russian plasticizer exports dropped from 6,585 tons in the first seven months in 2022 to 4,891 tons in the same period in 2023.  Exports this year have gone largely to Turkey and Uzbekistan. 

Imports of plasticizers increased from 19,549 tons in January to July 2022 to 21,527 tons in the same period in 2023.  The largest share of plasticizer imports comprises DINP which increased in the first seven months this year to 17,629 tons from 13,717 tons last year.  Most of Russia’s plasticizer imports this year came from South Korea, followed by China and India.

Elastokam goals in polyurethanes

After encountering multiple challenges following the course of Western sanctions, the Nizhnekamsk polyurethane producer Elastokam plans to launch the production of all types of polyurethane materials by 2025-2026.   At this stage it is not clear how these goals will be achieved.  Elastokam was set up originally as a jv between Nizhnekamskneftekhim and BASF two decades ago, but BASF has since been replaced by SIBUR. 

Elastokam has made a rebranding and began production of polyurethane systems under the brand Sibufoam.  Over the past year and a half, the consumption of polyurethane systems in Russia has decreased by about 20%.  A number of suppliers and consumers left, whilst the vacated niches have been filled by companies from China and Turkey.  The main restrictions on undertaking investment plans are linked to the lack of domestic isocyanate production.

Isocyanate/polyol imports from China into Russia

Due to sanctions, Elastokam lost some of its foreign partners in 2022, whilst access to isocyanates and low-tonnage chemistry was lost.   However, with the help of SIBUR, it was possible to find suppliers in China and elsewhere in Asia.  

TDI imports from China into Russia increased from 15,999 tons in January to July 2022 to 17,227 tons in the same period in 2023 whilst MDI imports increased from 33,277 tons to 75,630 tons.  Polyol imports increased from 23,568 tons in the first seven months in 2022 to 65,365 tons in the same period in 2023.

Outlook for Russian polyurethanes

The general perception of instability in the industry remains, but although market participants are gradually returning to discussing prospects and investment projects. The company looks at the third and fourth quarters of 2023 with cautious optimism, expecting growth of 4-5%.

Elastokam expects to increase its market share and enter new segments, including the segment of refrigeration equipment, where the company has already signed agreements on the supply of heat-insulating polymer materials for refrigerators with the Belarusian company Atlant and the Uzbek company Artel.  Contracts are being discussed with several more manufacturers that occupy a significant share of the Russian market of household refrigeration equipment. 

In the footwear industry Russian manufacturers use raw materials from Turkish and Chinese companies that have replaced European suppliers.  Elastokam plans to launch its own production of the polyol component of the polyurethane shoe system and enter this market with a domestic alternative.  Elastokam also intends to maintain the company's presence in the automotive industry. In the mass of a passenger car, 25-30% are elements made of polyurethanes, in particular, air ducts, seals, sound insulation, foam in the seats, etc.

Gazprom neftekhim Salavat-superabsorbents

Gazprom neftekhim Salavat expects to become the country's only producer of superabsorbent polymers (SAP).  In 2017, Gazprom neftekhim Salavat commissioned a complex for the production of acrylic acid and butyl acrylate, which produces crude acrylic acid, butyl acrylate and glacial acrylic acid. In the manufacture of products, our own propylene and butanol are used.

Plans for the implementation of the SAP production project were announced back in 2021. Then it was planned that the production capacity would be 45,000 tpa. Investments were estimated at 11 billion roubles.

Gazprom Linde Engineering has developed project documentation, and a license agreement for the use of the technology has been concluded with Superabsorbent Technologies AG (Switzerland).   The company has every chance to occupy a vacant niche and become the only manufacturer of SAP in the country. The consumption of these products is only growing every year. The implementation of the import-substituting project will allow the company to cover 60-70% of the needs for superabsorbents in Russia.

Akron Jan-Jun 2023

Akron’s net profit dropped by 74% over the first half of 2022 to 19.040 billion roubles ($199.4 million).  Turnover fell by 40% to $1.140 billion, and the EBITDA fell 55% to $478 million.  

By volume Akron's production of mineral fertilisers in the first half of the year increased by 7.1% compared to the same period last year to 3.67 million tons.  Ammonia production increased by 7.8% to 1.51 million tons, nitrogen fertilisers by 12.4% to 2.88 million tons.  Production of ammonium nitrate decreased by 13% to 1.11 million tons, and urea production increased by 17.5% to 975,000 tons.  Production of complex fertilisers increased by 0.9% to 1.212 million tons.   Overall, the production of basic commercial products increased by 6.1%, up to 4.3 million tons.  At the same time, methanol production dropped by 19.6% to 40,000 tons, formalin by 15.6% to 64,000 tons, and urea-formaldehyde resins by 16.5% to 76,000 tons.

Kuibyshevazot-modernsiation

Commissioning of the new granulated urea production facility continues. Its capacity will be 525,000 tpa. At the same time the first stage has been completed for the project for the production of nitric acid, ammonium nitrate solution and the ammonium nitrate granulation unit.  In the first half of 2023, the technical re-equipment of the first polymerization unit for polyamide production was completed, which made it possible to increase the quality of the polyamide production.

Volzhskiy Orgsintez-project to build potassium butyl xanthate plant in doubt

Following the seizure of assets by the state there are doubts whether Volzhskiy Orgsintez will complete the construction of a new potassium butyl xanthate production facility.  The company is already operating a plant with a capacity of 26,500 tpa and prior to the so-called renationalisation the aim was to increase capacity by another 20,000 tpa. 

Potassium butyl xanthate is a flotation reagent used in the enrichment of heavy, non-ferrous, noble and rare metals, native copper as a collector reagent.  Revenue for Volzhskiy Orgsintez increased by 23.5% in 2022 over 2021 to 15.48 billion roubles, whilst the net profit rose 1.6 times up to 2.92 billion roubles.

Kazakh gas treatment plant for polyethylene plant

KMG PetroChem LLP (a subsidiary of KazMunaiGaz) and Tengizchevroil (TCO) signed agreements for construction of Gas Separation Complex (GSK) project which is important for providing feedstocks for petrochemical production.   The construction of the GSK is expected to be carried out on the territory of the Tengiz field. GSK is an infrastructure facility designed for the production of ethane used as a raw material at a polyethylene plant at Atyrau.

The project includes the supply of dry gas from TCO to KMG PetroChem, the provision of technical services and other coordination issues during the construction and operation of the facility. All these efforts are aimed at supporting the plans of the Republic of Kazakhstan for the development of the country's petrochemical industry.

Kazakhstan Petrochemical has agreed on a loan of $150 million with the Eurasian Development Bank (EDB, which finances projects within the framework of the Eurasian Economic Union).

Butadiene project Kazakhstan change of ownership

KazMunaiGaz withdrew from the jv with Tatneft Butadien, and its 25% stake was transferred to the Samruk-Kazyna fund.  KazMunaiGaz withdrew from the joint venture on 19 June, and on the same day the Samruk-Kazyna Fund became its participant.  KazMunaiGaz owned 25% of the share, with the remaining 75% belongs to the Russian company Tatneft.  The change of the Kazakh owner will reduce the financial burden on KMG, transferring it to the parent company. 

KazMunaiGaz and Tatneft established the Butadien jv at the end of 2021.  Raw materials for the new plant, which was originally planned to be launched in 2026 in the Atyrau region, should be supplied from the Tengiz field by Tengizchevroil, and the finished products, in turn, will be sent to the KamaTyresKZ tire plant, launched at the end of 2022 near Karaganda. This is a joint venture between Tatneft and the Kazakh group Allur.

The estimated production capacity is 186,000 tpa of butadiene rubbers and 170,000 tpa of isobutane.  At the moment, design work is underway and technology licensors have been involved.  In the meantime, it is hoped that the replacement of KMG with Samruk-Kazyna in the Butadien project will get it off the ground.

The first stage of construction and installation work has already begun at the site.  The plant will produce five different types of products including styrene-butadiene-styrene-rubber, divinyl-styrene synthetic rubber, butadiene, and isobutane-isobutylene fraction.  In November 2022, Butadien signed a butane purchase and sale agreement with Tengizchevroil for feedstocks. The supply volume will be 380,000 tpa of butane.  The launch of production is scheduled for 2026 on the territory of the National Industrial Petrochemical Technopark in the Atyrau region. 

Daewoo-Turkmenistan ammonia and urea

Daewoo E&C is preparing to implement a major project in the gas chemical industry of Turkmenistan. The new plant will produce mineral fertilisers from natural gas.  The plant's production capacity will be 660,100 tpa of ammonia and 155,000 tpa of urea.

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