MOL crude purchases 2023

Despite concerns over crude supply from Russia MOL’s purchases of Urals blend accounted for 61% of total oil imports in the first half of 2023.  Average prices of €341.2 per ton achieved by MOL from Russia mare much lower than any of the alternative suppliers.  Hungary has asked the EU for a one-year extension of an exemption from sanctions against Russia for MOL and also for Slovnaft to export products refined from Russian oil to the Czech Republic.  The EU is reluctant to extend the exemption, but MOL claims that it needs one more year to complete investment at its refineries.  Last year, only about 5% of Slovnaft's oil intake was non-Russian but this will rise to about 30%-35%, or 2 million tons, by the end of 2023.

MOL has already started transporting crude oil from its oil field in Azerbaijan to Slovnaft in Bratislava via the Adria oil pipeline.  MOL and Slovnaft have agreed with JANAF on a fee for the use of the Adria pipeline, which plays an important role in securing alternative oil supplies for the CEE region.   Slovnaft has been using the Adria pipeline more actively since February this year.  However, both Slovnaft and MOL believe that the current agreement does not create a sustainable long-term basis for supplies via the Adria pipeline to Slovakia.

The Orlen Group in Poland has secured further supplies of crude oil from Norwegian fields in the North Sea. The agreement signed with BP provides for the supply of up to 6 million tons of raw material during the year for the Plock refinery.  Supplies from Norway even exceeded supplies from Saudi Arabia in July.  From the total of 15.244 million tons of crude imported into Poland in the first seven months, supplies from Saudi Arabia totalled 7.241 million tons at €557.1 per ton and from Norway 4.274 million tons at €545.6 per ton.

The Czech Republic consumes around 8.0 million tpa of which around two thirds currently is sourced from Russia.  In future larger volumes will be steadily ensured by the TAL crude oil pipeline leading from Trieste.  The second half of 2024 will be particularly difficult, when the capacity of the TAL pipeline will be temporarily limited due to modifications and expansion to 4.0 million tpa. 

Refining Central Europe

Refining volumes in Central and South East Europe were slightly lower in the first half of 2023 against the same period in 2022, due partly to demand side factors and the adaptation of the Gdansk refinery into the Orlen Group.  Supply side dynamics has seen the greatest change with the reduction in purchases from Russia and diversification into other sources.  

Purchasing crude from Russia is faced with EU sanction deadlines but most countries have come up with diversification strategies even if they have still continued to buy.  Bulgaria has been granted an exception to the EU ban on Russian crude by the end of 2024, but there are efforts by the Bulgarian government to stop buying Russian crude sooner than the exception allowed.  This could put pressure Lukoil to sell its business in Bulgaria.  Paradoxically the Bourgas refinery processes Russian oil and then sells oil products to Ukraine for the armed forces against Russia.  Lukoil may also face pressures to sell its assets at the Ploesti refinery in Romania.

Central European ethylene production Jan-Jun 2023

Ethylene production in Central Europe amounted to 676,800 tons in the first half this year, down from 840,000 tons in the same period in 2022.  Production falls have been influenced by lower demand combined with higher costs.  Both MOL and Orlen groups have undertaken extended maintenance this year and thus all plants have recorded lower production than in the first half of 2022. 

Polish petrochemical production Jan-July 2023

Ethylene production in Poland dropped from 279,200 tons in January to July 2022 to 215,400 tons this year, whilst propylene fell from 266,000 tons to 185,600 tons.  Butadiene production at Plock dropped to 35,500 tons from 37,100 tons.  In the plastics sector polyethylene production dropped to 180,100 tons in January to July 2023 versus 190,200 tons in corresponding period last year and polypropylene dropped from 207,200 tons to 160,500 tons.

Orlen Group Petrochemicals Jan-Jun 2023

The Orlen Group reported strong overall results in the first half of 2023 although profits were limited by the petrochemical division which recorded operating losses in each of the first two quarters.  Whilst costs of energy and raw materials have declined in the first half of 2023 sales revenues from petrochemicals have declined at a greater rate, thus resulting in operating losses of €146 million in the first half in 2023.  This compares against an operating profit of €385 million in the first half of 2022.  

Sales revenues for the entire Orlen Group’s petrochemical activities dropped in the second quarter of 2023 to €1071 million against €2009 in the same quarter in 2022 whilst costs dropped from €1751 million to €1194 million.

Orlen’s petrochemical divisions mostly reflected lower rates in the first half of 2023.  Lower margins were recorded on olefins, polyolefins and fertilisers.  For PTA, lower sales were recorded by 37% over the same period in 2022, whilst olefin sales dropped by 23%, polyolefins by 9% and fertilisers by 1%. 

Petrochemical margins for PKN Orlen remain relatively high despite the weaker performance in the past few quarters.  Positive margins helped to offset the high energy costs in 2022 which affected European petrochemical producers. 

Although olefin margins for ethylene and propylene were lower in the second quarter against the corresponding period last year, it should be noted that April to June 2022 was an exception to the historical average margin levels.  In the second quarter this year ethylene margins amounted to €664 per ton in the second quarter against €810 in Q2 2022 whilst propylene dropped from €820 per ton to €554 per ton.

Butadiene margins amounted to €369 per ton in the second quarter this year, after peaking at €614 in the third quarter last year.  In the aromatics sector benzene, toluene and paraxylene margins showed a gradual declining trend in the first two quarters although historically in line with average numbers.

The main problem for Orlen Group’s petrochemical sales in 2023 has been lower sales due to weaker economic trends.  The first half of 2022 saw sales of 2.759 million tons drop to 2.260 million tons in 2023.  The slowdown started abruptly in the third quarter in 2022 and this trend is expected to stay the same for the rest of this year.

Orlen Group utilisation rates

Utilisation rates this year have been affected by a combination of demand side factors and maintenance.  The olefins complex at Plock operated at 78% of capacity in the first three months in 2023, which then dropped to 70% in the second quarter.  Orlen has scheduled a shutdown at the Olefin 11 plant at Plock from 4 October to 13 October, although these dates are provisional. 

Lower olefin production in the first half was partly influenced by the production problems at Anwil’s PVC plant, which only ran at 64% in the first quarter and then 42%.  Utilisation in the second quarter was also affected by other shutdowns.  Other facilities at Plock such as the BOP division ran at 67% in the second quarter due to weak demand from polyolefins after running at 70% in the first quarter.  The Metathesis plant at Plock ran at only 18% in the second quarter due partly due to maintenance on the FCC 11 unit. 

In other areas of Orlen Group’s petrochemical division, PTA production at Wloclawek at 66% of capacity in the first quarter which then dropped to 51% in the second quarter due to weak demand and maintenance downtime.  In the Czech Republic Orlen Unipetrol’s olefin complex operated at 85% in the first quarter but then dropped to 49% in the second quarter due to a steam cracker maintenance shutdown and fire on polypropylene installation on 23 May.  In Lithuania the PPF Splitter reported 80% utilisation in the second quarter due to the lack of downtime. 

Orlen petrochemical investments

The construction of the Olefiny III Complex is a interpreted as a necessary step towards transforming the group’s existing refining and petrochemical assets at Plock.  Introducing new petrochemical assets at Gdansk could also help the integration of petrochemical processes within the Orlen Group and unlock operational synergies.  Orlen is in the early stages of foundation work on its Olefiny III investment but the process will accelerate by the end of the year.   By the end of 2023 up to 10,000 workers could be employed on the project. 

Regarding other investments, Orlen is currently assessing the construction of a new ethylene pipeline is to run from Plock to Wloclawek, allowing the shipment of ethylene to Anwil.  The route of the pipeline has been defined in the environmental impact report of the project, as well as in the draft local spatial development plans of individual municipalities.  Anwil uses ethylene for the production of PVC supplied by pipeline directly from Orlen's petrochemical installations in Plock.  Chlorine produced in Anwil in the process of brine electrolysis, is supplied by pipeline from IKS SOLINO.

Polish propylene & butadiene imports, Jan-Jul 2023

Poland imported 74.464 tons of propylene in January to July against 86,810 tons in January to July 2022.  Market sources of propylene imports into Poland have changed significantly in the past year.   To replace imports from traditional suppliers Russia and Ukraine, imports this year apart from Germany have been sourced from Bulgaria, the Czech Republic, the Netherlands and Serbia.  Although volumes overall declined slightly, average prices dropped from €1344.6 per ton in January to July last year to €969.3 this year.  Prices for propylene started falling in the latter part of the 2022 following feedstock trends.  Whilst feedstock prices have fluctuated this year, the weak demand has been one of the main factors affecting prices. 

Butadiene import prices for Poland dropped from €1094.9 per ton in January to July 2022 to €955.4 in January to July this year, with volumes declining from 60,998 tons to 43,538 tons. 

Czech propylene & butadiene trade Jan-Jul 2023

Propylene imports into the Czech Republic rose from 24,007 tons in January to July 2022 to 29,109 tons this year, with main suppliers including Germany, Romania and Poland.  Average prices for propylene imports dropped in the first seven months in 2023 to €906.2 per ton against €1373.0 per ton. 

Exports of propylene are rarely possible from the Czech Republic, but in May this year a surplus allowed shipments of 4,928 tons to Poland, 1,033 tons to Germany and 594 tons to Slovakia. 

Imports of butadiene into the Czech Republic amounted to 48,036 tons in January to July 2023, all of which was supplied by Germany and Hungary.  Imports increased this year from 43,972 tons in the first seven months in 2022.

Hungarian propylene exports Jan-Jun 2023

Exports of propylene from Hungary were slightly up in the first six months, amounting to 42,599 tons versus 40,673 tons in the same period in 2022. 

Export prices from Hungary dropped from €1300.3 per ton to €1132.7 per ton.   Exports to Slovakia from MOL to Slovnaft rose from 34,574 tons to 41,580 tons in January to June 2023.  Slovnaft uses propylene for the production of polypropylene.  Although MOL currently produces more propylene than it consumes it is currently building a new propylene plant with a capacity of 100,000 tpa.

Hungarian butadiene exports amounted to 28,808 tons in the first six months in 2023 against 19,380 tons in the same period in 2022.  Shipments into Poland totalled 14,913 tons in January to June 2023 against 15,099 tons in the same period in 2022.  Exports to Germany dropped from 5,035 tons to 1,995 tons and to the Czech Republic rose from 4,088 tons to 9,906 tons.  Average prices for Hungarian butadiene exports fell to €1048.6 per ton versus €876.0 in 2023. 

Central European styrene trade Jan-Jul 2023

Poland imported 47,060 tons of styrene in January to July against 63,378 tons in January to July last year.  The Netherlands provided 24,225 tons in the first seven months versus 38,623 tons in the same period in 2022.  The Czech Republic has also been an important supplier this year.  Styrene import costs dropped from €1693.6 per ton last year to €1251.2 in the first seven months in 2023. 

Italy remains the dominant source of styrene imports into Hungary, supplied by Versalis to its polystyrene plant at Szazhalombatta.  Imports of styrene into Hungary totalled 34,659 tons in January to June 2023, down from 49,878 tons in the same period in 2022.  Prices for styrene imports into Hungary dropped from €1599.8 per ton in January to June 2022 to €1461.1 per ton in 2023.

Czech petrochemical trade, Jan-Jul 2023

Ethylene exports from the Czech Republic amounted to 6,814 tons in January to July 2023 versus 8,566 tons in the same period last year.  Czech imports of ethylene amounted to 25,869 tons in January to July 2023, down from 15,025 tons in January to July last year. 

Propylene imports into the Czech Republic rose from 22,828 tons in January to July 2022 to 29,090 tons this year, with main suppliers including Germany, Romania and Poland.  Czech imports of butadiene amounted to 43,359 tons in January to July 2023, all of which was supplied by Germany and Hungary.  Czech exports of ethylbenzene amounted to 73,249 tons against 55,986 tons in January to July 2022.  All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group.  Imports of benzene into the Czech Republic dropped from 49,624 tons in January to July last year to 19,366 tons in January to July 2023. 

Polish polyolefins production Jan-Jul 2023

Production of polyethylene in Poland fell from 190,200 tons in the first seven months in 2022 to 180,100 tons in the same period this year.  Production has been down this year partly due to lower demand. 

Polypropylene production fell by a greater margin than polyethylene, falling from 207,200 tons in the same period in 2022.  Currently polypropylene production in Poland takes place at Plock, but in the near future production will start at the new Polimery Police plant.  This plant was expected to start in August or September, but Hyundai Engineering announced at the end of August an extension of the project by 2-3 months.  Problems with the equipment during the start-up phase of some installations as the reason for the delay.   The new Grupa Azoty unit is expected to produce 437,429 tpa of polypropylene and 430,000 tpa of propylene.

Overall, for Central Europe polypropylene production amounted to 527,300 tons in the first half of 2023 against 579,722 tons in the same period in 2022.  Hungary reduced production of polypropylene in the first half of 2023 to 127,000 tons against 186,000 tons in January to June 2022.  Slovakia produced 130,000 tons in the first half this year and the Czech Republic 126,000 tons.

Polish polpropylene trade Jan-Jul 2023

Polish polypropylene imports, including homo grade and copolymers, fell in January to July 2023 to a total of specifically 487,085 tons versus 567.337 tons in January to July 2022.  Average prices per ton decreased from €1878.6 to €1500.4 per ton.  Homo grade polypropylene imports specifically dropped from 373,795 tons in the first seven months in 2022 to 308,224 tons in the same period this year, whilst copolymer imports dropped from 179,302 tons to 166,095 tons. 

Germany supplied 49,363 tons of propylene copolymers to Poland in the first seven months for €80.763 million followed by the Netherlands with 25,967 tons for €40.531 million and Belgium supplying 23,984 tons for €40.470 million. 

Regarding export activity from Poland, shipments amounted to 130,697 tons against 179,206 tons in January to July 2022.  Homo polymer grades comprised the main category of Polish polypropylene exports, where Germany was the largest destination taking 21,461 tons in the first seven months for €29.085 million.  Germany was followed by the Czech Republic taking 16,707 tons from Poland for €21.126 million. 

Polish polyethylene trade Jan-Jul 2023

Polish trade in polyethylene was down in the first seven months for both imports and exports, both in volume and value.  Economic conditions affected both demand and pricing.   Overall Poland carries a large deficit in polyethylene supply, which is part of the reason behind Orlen’s Olefiny 111 project at Plock which is now under construction.

 Polish imports of polyethylene totalled 682,771 tons in January to July this year against 600,481 tons in January to July 2022, with average prices falling from €1863.6 per ton to €1427.4 per ton. Imports of polyolefins and all types of plastics from Russia into Poland saw a progressive decline in 2022, with other suppliers from Europe taking more market share. 

Total costs of polyethylene imports into Poland amounted to €973.944 million in the first seven months against €1483.636 million in January to July last year.  HDPE is the largest category of imported polyethylene into Poland, amounting to 236,535 tons in January to July versus 271,302 tons in January to July 2022.  Germany was the largest supplier of HDPE to the Polish market in the first seven months this year.

Polish polyethylene exports amounted to 172,853 tons in the first seven months in 2023 against 208,826 tons in the first seven months in 2022.  Average prices for polyethylene exports from Poland declined to €1382.6 per ton against an average of €1700.3 per ton in the period January to July from last year. 

Revenues from exports decreased from €355.060 million to €238.978 million in January to July 2023.  In the first seven months this year exports of HDPE from Poland amounted to 121,003 tons versus 142,432 tons in January to July 2022.

Czech polyethylene trade Jan-Jul 2023

Czech prices for both exports and imports of polyolefins were lower in the first seven months this year against the same period in 2022.  Polyethylene exports amounted to 235,546 tons in the first seven months of which HDPE comprised 210,969 tons.  Germany was the largest destination for Czech HDPE supplied from Litvinov this year, amounting to 84,844 tons in January to July for €103.717 million.  Other important markets for Czech polyethylene exports include Poland, Italy and Belgium. 

For imports of all forms of polyethylene, Czech inward shipments amounted to 174,430 tons in January to July against 189,586 tons in the same period in 2022, with prices dropping from €1996.9 per ton to €1655.7.  Germany was the largest source of polyethylene imports, amounting to 39,249 tons for €60.726 million, followed by Belgium with 21,617 tons for €34.886 million.

Hungarian polyethylene trade Jan-Jun 2023

MOL’s polyethylene exports rose slightly from 172,109 tons in January to June 2022 to 172,804 tons in the same period this year whilst revenues fell from €283.744 million to €226.245 million in 2023.  Average prices dropped from €1583.8 per ton in 2022 to €1342.1 per ton.

HDPE shipments from Hungary increased from 112,857 tons in January to June 2022 to 115,509 tons in the same six months in 2023, whilst exports of LDPE increased from 42,362 tons to 48,059 tons.   

Hungary remains a net exporter of LDPE and HDPE and still a net importer of LLDPE and ethylene copolymers.  In the first six months in 2023 imports of all grades of polyethylene into Hungary amounted to 109,968 tons against 122,216 tons in the same period in 2022.  Imports costs for polyethylene fell to €173.393 million against €215.449 million in the same period last year. 

Hungarian import prices for polyethylene decreased on average from €1920.7 in January to June 2022 to €1682.2 in the first six months in 2023 with gradual price declines since the start of the year. 

Czech polypropylene trade Jan-Jul 2023

Exports of all forms of polypropylene from the Czech Republic amounted to 159,683 tons in January to July versus 174,627 tons in January to July 2022, with average prices dropping from €1814.6 per ton to €1530.7.  Homo-grade PP provides the main category of Czech polypropylene exports, amounting to 128,044 tons in January to July this year versus 142,796 tons in the same period in 2022.

For imports of all forms of polypropylene, Czech inward shipments fell from 305,597 tons in January to July 2022 to 315,153 tons in January to July this year, with average prices dropping from €1952.8 per ton to €1631.1. 

Hungarian polypropylene trade Jan-Jun 2023

Regarding Hungarian polypropylene exports, MOL shipped 65,746 tons of homo grade polypropylene (valued at €91.453 million) in January to June 2023 which was up from 60,551 tons in the same period in 2022 (€109.487 million in value), whilst copolymer exports dropped from 50,910 tons (€99.473 million in value) tons to 46,790 tons (€67.393 million).    

The most important destinations for Hungarian polypropylene exports include Poland, Italy, Germany and the Czech Republic.  Export revenues dropped for all grades of polypropylene from €219.843 million to €168.174 million, with average prices dropping from €1782.7 per ton to €1398.3.

Polypropylene imports into Hungary amounted to 97,554 tons in the first six months in 2023 versus 112,590 tons in the same period in 2022, with costs falling in January-June 2023 to €158.876 million from €206.253 million last year. 

Overall average prices dropped from €1831.9 per ton to €1628.6 per ton this year, whilst copolymer prices dropped from €1845.9 to €1538.4 per ton.  By category homo grade imports into Hungary comprised 58,503 tons in January to June 2023 against 62,514 tons whilst copolymers fell to 26,502 tons against 33,854 tons.

Czech synthetic rubber trade Jan-Jul 2023

Czech exports of synthetic rubber amounted to 69,335 tons in January to July this year versus 85,807 tons in the same seven months in 2022.  Imports declined from 64,175 tons to 52,318 tons in January to July 2023.  Natural rubber imports into the Czech Republic dropped from 36,745 tons to 33,856 tons.    

Exports of emulsion styrene butadiene rubber (ESBR) from the Czech Republic dropped in the first seven months to 19,432 tons against 45,367 tons in the same period last year.  The Kralupy plant includes capacities of 110,000 tpa of ESBR and its permanent closure will reduce Synthos’ total ESBR capacity to 320,000 tpa.  Despite the closure of the Kralupy plant, Synthos remains the largest producer of ESBR in Europe, with 190,000 tpa of ESBR capacity at its site at Oswiecim and 130,000 tpa at Schkopau. 

Czech butadiene rubber trade

The Czech Republic exported a total of 61,756 tons of butadiene rubber in the first seven months in 2023 against 65,422 tons in the same period in 2022.  Average prices fell from €2064.2 per ton to €1808.4 per ton.  Czech exports of butadiene rubber to India amounted to 7,461 tons was shipped in January to July 2023 against 13,243 tons in the same period in 2022.  Other important markets included Poland where exports amounted to 8,362 tons in the first seven months this year against 9,001 tons in the same period in 2022, and South Korea rising from 3,324 tons to 8,216 tons. 

Hungarian synthetic rubber imports Jan-Jun 2023

Hungarian imports of synthetic rubber ended in the first six months this year very close to last year’s data both in regard to volumes and values.  Volume imports amounted to 70,165 tons in the first six months this year against 70,686 tons in 2022 whilst overall costs rose slightly from €159.482 million to €159.494 million.     As a result, average prices rising amounted to €2273.1 per versus €2256.2 per ton. 

Butadiene rubber imports rose from 22,698 tons to 26,957 tons, with costs rising from €44.673 million to €49.951 million.  Imports from Russia dropped from 9,225 tons to 2,318 tons in January to June 2023 whilst imports from Indonesia rose from only 98 tons in the first six months last year to 11,632 tons.  Effectively Indonesia replaced Russian imports in the first half year although it is not clear if this trend will continue for the remainder of the year.

Imports of halogenated butyl rubber dropped from 8,547 tons in the first six months in 2022 to 4,056 tons and SBR imports rose from 16,213 tons to 25,056 tons.  

Polish rubber prices Jan-Jul 2023

Rubber import prices into Poland for both synthetic and natural have seen gradual declines from January to July this year as a confluence of economic factors have taken effect.  Natural rubber prices dropped from €1735 per ton in January to €1577 per ton in July, whilst synthetic rubber prices dropped from €2306 per in January to €2193.  Overall, synthetic rubber prices dropped from €2572 in the first seven months in 2022 to €2178 in 2023.

Polish rubber trade Jan-Jul 2023

Poland imported 152,234 tons of synthetic rubber in January to July this year against 174,043 tons in January to July in 2022.

Before the Russian invasion of Ukraine Poland was a leading importer of synthetic rubber from Russia.  Although sanctions were introduced in 2022 amendments were made in early 2023 to allow tyre manufacturers to adapt gradually to new supply sources.  Despite concessions imports of rubber from Russia have been in general decline.  Nizhnekamskneftekhim, in particular, has shifted large volumes of sales from European markets to an easterly direction.  Isoprene rubber has thus far been excluded from sanctions and this now comprises the main share of rubber export shipments from Russia to Poland. 

In the first seven months in 2023 Poland imported 31,305 tons of synthetic rubber from Russia for a total value of €52.0 million.   This compares against 92,653 tons in January to July 2022 and 133,341 tons in January to July 2021.  Respectively this amounted to €182.7 million and €214.0 million. 

Imports of halogenated butyl rubber from Russia amounted to 3,430 tons from the total of 6,387 tons in the period January to July 2023.  Average prices from Russia amounted to €2444 per ton against the overall average of €2592.  The US and UK have started supplying Poland this year to replace some of the Russian imports.    

Synthetic rubber exports from Poland amounted to 151,719 tons in the first seven months against 180,695 tons in January to July 2022.   Exports of butadiene rubber from Poland amounted to 28,013 tons in January to July versus 27,104 tons last year. 

Synthetic rubber production at Oswiecim for Synthos amounted to 108,800 tons in January to July 2023 from 163,800 tons in the same period in 2022.  Production has been affected this year by demand side factors.

Polish benzene exports Jan-Jul 2023

Polish exports of benzene totalled 88,917 tons in January to July against 104,377 tons in the same period last year.  Average prices dropped to €1178.2 per ton against €858.8 per ton in January to July last year.  Germany purchased 66,160 tons from Poland in the first seven months and the Czech Republic 12,006 tons. 

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

Polish-Czech aromatic imports Jan-Jul 2023

Phenol imports into Poland amounted to 44,771 tons in January to July 2023 for €57.741 million.  In January to July this year Germany was the dominant supplier of phenol to Poland, shipping 32,231 tons for €30.553 million.

Phthalic anhydride imports into Poland dropped from 20,303 tons in January to July 2022 to 18,523 tons in the same period in 2023.  Imports from South Korea amounted to 9,653 tons in the first seven months for €10.835 million, followed by the Czech Republic which supplied 2,281 tons from the Deza plant for €3.371 million. 

In other product areas, styrene imports amounted to 47,060 tons in the period January to July 2023 versus 63,378 tons in the same period in 2022 whilst ethylbenzene imports rose from 61,773 tons to 73,671 tons.  Nearly all of the ethylbenzene imports come from the Czech Republic.  Czech benzene imports dropped in the first seven months to 16,212 tons against 38,025 tons in the same period in 2022, whilst toluene imports dropped to 3,082 tons and styrene rose to 17,491 tons. 

Hungarian aromatic imports Jan-Jun 2023

In the first half of 2023 Hungarian benzene imports of benzene amounted to 6,809 tons for €6.529 million, against very little imports in the same period in 2022.  The largest supplier of shipments into Hungary was the Czech Republic which provided 3,296 tons in the first six months, followed by 1,611 tons from Slovakia.

Toluene imports into Hungary amounted to 18,136 tons in the first six months for €20.184 million in value.  This compares against 25,591 tons in the first six months in 2023 for a total value of €26.951 million.  Toluene imports this year have been lower in correlation with lower TDI production.  Germany was the largest supplier of toluene providing 7,172 tons to the Hungarian market versus 13,913 tons in the same period in 2022.  Other suppliers to Hungary included the Netherlands, Poland, Belgium and Romania. 

Central European caprolactam market

Poland produced 52,000 tons of caprolactam in the first seven months against 95,000 tons in January to July last year and 93,800 tons produced in January to July 2021.  Since the second half of 2022 caprolactam production by Grupa Azoty in Poland has been affected higher energy costs combined with weak demand for polyamide.  Over the past few years Poland has been transformed from a net exporter of caprolactam to a net importer, if only marginal. In the first seven months caprolactam imports amounted to 6,545 tons, nearly all of which was supplied from Germany.

The Czech Republic exported 13,124 tons of caprolactam in January to July down from 24,714 tons in the same period last year.  Average prices dropped from €2495.4 per ton to €1765.2 in 2023.  All of the exports were shipped to European countries.  Italy was the largest destination for Spolana’s exports, reducing shipments from 9,764 tons in January to July 2022 to 13,124 tons this year.

Polish PTA exports Jan-Jul 2023

PTA exports from Poland amounted to 132,248 tons in January to July this year against 256,976 tons in January to July 2022, with average prices falling from €971.8 per ton to €854.8 per ton.  The key factor this year behind the lower purchases was that Germany reduced purchases from 212,872 tons to 106,550 tons.   Turkey was the second largest destination for PTA export shipments, taking 4,478 tons versus 5,460 tons in the first seven months in 2022. 

In the first half of 2023 the Orlen Group undertook extended downtime at the PTA unit at Wloclawek, which was partly due to weak demand.  Orlen is now accepting offers for maintenance contracts for April 2024 when a shutdown lasting two weeks is planned.  Revenues from PTA sales whether export or domestic amounted to €82.5 million in the second quarter this year compared against €161.3 million in the same period last year.  By volume sales dropped from 330,000 tons in January to June 2022 to 200,000 tons in January to June 2023

Revenues from PTA sales in the first half of 2023 amounted to €162.7 million against €309.8 million in the same period in 2022, with export revenues dropping from €216.9 million to €113.3 million. 

Production at Wloclawek totalled 200,000 tons in the first half of 2023 against 333,000 tons in the same period last year whilst sales dropped to 200,000 tons from 330,000 tons.  This included a drop in exports from 183,300 tons to 96,000 tons. 

Hungarian TDI-MDI exports Jan-Jun 2023

Hungarian TDI exports dropped in the first six months this year to 122,873 tons against 148,187 tons in the same six months in 2022.  Average prices rose from €2730.8 per ton to €2853.7 in 2023.  Although prices overall were higher in the first half this year the trend has been falling dropping from a peak of €3255.4 per ton in January to €2812.7 per ton in June which measured against €2769.8 per ton in June 2022.  Thus, the gap between 2023 and 2022 prices is gradually narrowing.

Lower volume sales were recorded this year due largely to weaker economic performance throughout Europe.  Exports of TDI to Belgium rose from 18,609 tons in the first six months last year to 18,911 tons in January to June 2023 whilst volumes to Italy fell from 20,318 tons to 14,942 tons. 

Elsewhere in West Europe exports to Portugal dropped from 7,942 tons to 6,272 tons, and to Spain from 6,086 tons to 3,612 tons.  In Central Europe shipments to Poland fell from 17,413 tons to 14,003 tons and Romania from 7,173 tons to 6,782 tons.

MDI exports from Hungary dropped in the first six months to 116,749 tons from 91,725 tons in the same period last year.  The most significant drop in sales was the US where no shipments were made in the first six months against 22,104 tons in January to June 2022.  In contrast to higher TDI prices, MDI export prices dropped from €2603.9 per ton in January to June 2022 to €2153.5 per ton this year.

Poland was the largest destination for Hungarian MDI exports, shipping 17,889 tons in the first six months in 2023 versus 20,892 tons in the first same period in 2022.  Romania is the second largest market in Central and South East Europe, taking 9,736 tons in the first six months this year which was down from 11,672 tons. 

BorsodChem-annual TDI shutdown and MDI expansion

BorsodChem’s TDI plant (250,000 tpa) started annual maintenance on 15 July which lasted until 18 August.  This shutdown was a routine maintenance process based on the annual schedule and will not affect the company's production and operation.

The MDI plant (350,000 tpa) started maintenance on 18 July and this shutdown is expected to last for around 80 days. This shutdown involves modernisation and the expansion of capacity to 400,000 tpa.   At the end of June this year BorsodChem opened new units for nitrobenzene and aniline for the MDI production chain.  In addition to the aniline and nitrobenzene projects, the second new cogeneration power plant was put into use, doubling the company's generation capacity to meet the company's growing demand for heat and electricity while assisting the transition to green energy.

Central European isocyanate trade Jan-Jul 2023

MDI imports into the Czech Republic totalled 22,349 tons in January to July 2023 against 21,205 tons in the same period in 2022.  Average prices dropped from €2667.2 per ton to €2368.1.    The leading supplier was Hungary which shipped 6,661 tons in the first seven months against 2,891 tons in the same period last year.  TDI imports into the Czech Republic Czech Republic amounted to 4,206 tons in January to July this year versus 4,567 tons in January to July 2022.   

MDI imports into Poland totalled 83,872 tons in January to July 2023 against 88,553 tons in January to July last year.  Due to lower volumes overall costs for MDI imports into Poland dropped from €231.920 million to €183.988 million, with average prices dropping from €2619.0 per ton to €2193.7 in January to July 2023.  Germany reduced shipments to 20,728 tons against 25,257 tons in January to July 2022, whilst imports from Hungary amounted to 21,495 tons against 23,426 tons. 

TDI imports into Poland amounted to 37,561 tons in January to July against 44,620 tons in the same period in January to July 2022.  Prices this year averaged €2913.2 per ton in the first seven months against €2793.7 per ton in 2022.  The cost of toluene was one of the factors behind the rise in TDI prices, but also supply/demand factors.  The supply of TDI is considered in short supply in Europe resulting in imports from countries such as South Korea and the US. 

European polyol market prices 2023 vs 2022

European prices for polyols have seen large falls in 2023, particularly for flexible grades and to a lesser extent rigid grades.  Flexible polyol prices dropped from €2455 per ton in June 2022 to €1525 per ton in June this year, whilst rigid grade polyols fell from €2800 per ton to €2150 per ton.

The weak demand combined with extra supply has led to keen price competition in recent months resulting in lower profitability for European polyol producers.  Polyester polyols intended to a large extent for the production of rigid foams recorded declines.

MOL currently hopes to complete the 200,000 tpa polyol project in the second half of 2023.  The completion will take place simultaneously as the propylene glycol and propylene oxide plants are finished.  The project schedule overall is around 97% completed.  The polyol project at Tiszaujvaros was originally scheduled to start in mid-2021 but the pandemic slowed the progress down sharply which has been followed by the impact of the war in Ukraine. 

Czech polyol imports Jan-Jul 2023

Czech polyol imports increased in the first seven months to 26,551 tons against 24,396 tons in the same period in 2022, with average prices dropping from €2895.4 per ton last year to €2590.8 in the first seven months in 2023.  The leading supplier to the Czech market was Belgium which shipped 8,148 tons in the period January to July 2023 against 6,147 tons last year, followed by Germany which exported 4,594 tons down from 5,159 tons. 

Polish polyol trade Jan-Jul 2023

Polish polyol imports amounted to 82,574 tons in the first seven months in 2023 against 89,021 tons in the same period in 2022.  The major sources of imports came from Belgium, Germany and the Netherlands.  Polyol import prices dropped from €2644.3 per ton to €2129.3 per ton.  The largest source of imports came from Germany in the first seven months, amounting to 19,414 tons against 16,546 tons in the same period in 2022.

Hungary imported 21,690 tons of polyols in the first six months this year against 16,343 tons in the same period in 2022.  The largest source of imports came from Belgium in the first six months, amounting to 11,127 tons against 984 tons in the same period in 2022.

Exports of polyols from Poland in the first seven months amounted to 32,316 tons against 33,637 tons in the same period in 2022.  Destinations for deliveries were focused mostly on Europe in 2023, led by Germany taking 4,584 tons in the first seven months followed by Italy taking 3,873 tons.  Due to lower prices this year export revenues dropped from €93.609 million to €75.749 million.

Hungarian maleic anhydride exports Jan-Jun 2023

Hungary exported 9,468 tons of maleic anhydride in the first six months this year against 9,717 tons in the same period in 2022, with average prices dropping from €2258.0 per ton to €1267.0.  Export shipments to Italy and Austria amounted to 1,524 tons and 1,606 tons in the first six months this year, down from 1,548 tons and up from 1,345 tons respectively last year.  Exports to Poland from Hungary dropped from 2,879 tons to 1,575 tons.

Hungarian acrylonitrile imports Jan-Jun 2023

Hungary imported 12,368 tons of acrylonitrile in the first six months in 2023 against 20,026 tons last year.  The Netherlands was the main source of imports in both years, shipping 5,917 tons in January to June 2023 versus 12,701 tons in 2022.  Acrylonitrile prices dropped on average from €2404.3 per ton in the first six months last year to €2203.5 per ton in 2023. 

Hungarian aniline imports Jan-Jun 2023

Aniline imports into Hungary increased from 48,143 tons in the first six months in 2022 to 68,784 tons in the same period in 2023.  Inward shipments from BorsodChem-MCHZ in the Czech Republic amounted to 39,114 tons against 46,056 tons in the same period last year.  Belgium supplied 18,603 tons in the first half this year against only 799 tons in the same period in 2022.  Cost prices of aniline imports dropped from €1860.1 per ton to €1481.0 in 2023.

BorsodChem opened its new plants for nitrobenzene and aniline at the start of July.  The nitrobenzene plant consists of a capacity of 240,000 tpa and aniline at 200,000 tpa, in addition to a plant for concentrated nitric acid plant with a capacity of 1,000 tpa. 

Polish organic chemical trade Jan-Jul 2023

Exports of organic chemicals fell from 1.442 million tons in January to July last year to 885,300 tons this year, whilst imports into Poland dropped from 3.100 million tons to 2.331 million tons.    High energy prices played a key role in driving up values last year which are still impacting on production and trade. 

Ethylene oxide imports into Poland totalled 9,341 tons in January to July versus 7,787 tons in January to July 2022.   Poland stopped importing ethylene oxide from Russia in May last year. 

Ethylene glycol imports increased in the first seven months to 59,097 tons versus 31,535 tons in the same period last year.  Belgium supplied the largest volume of glycols to the Polish market, shipping 49,516 tons in the first seven months. 

Methanol imports into Poland totalled 382,908 tons in January to July this year against 556,017 tons in the same period in 2022. 

For other organic chemical imports Poland imported 20,465 tons of acetic acid in January to July against 29,372 tons in January to July 2022.  The US was the leading supplier, shipping 9,704 tons followed by the UK with 4,780 tons.  Average prices dropped from €1181.0 per ton to €750.3 per ton.  Ethyl acetate imports into Poland amounted to 10,733 tons in January to July this year against 9,147 tons in January to July 2022.  Belgium provided the largest share of imports. 

Regarding export activity in organic chemicals shipments of monochloroacetic acid (MCAA) rose sharply in the first seven months to 20,914 tons against only a few hundred tons in the same period in 2022. MCAA production is undertaken by the PCC Group at Brzeg Dolny.  The destinations for Polish MCAA exports are spread throughout Europe including Germany, Italy, France and Spain.

Other organic chemical exports from Poland include acetone where shipments amounted to 8,054 tons in the first seven months this year versus 9,589 tons in January to July 2022.   Normal butyl acetate exports dropped from 9,019 tons to 6,425 tons in January to July 2023.

Central European methanol trade Jan-Jul 2023

Czech imports of methanol amounted to 33,511 tons in the first seven months this year against 26,804 tons in the same period in 2022.  Russia accounted for 6,237 tons against 19,303 tons in January to July last year whilst imports from Poland increased from 20,694 tons to 29,886 tons.  Prices per ton for methanol imports into the Czech Republic dropped from €463.7 in the first seven months last year to €385.9 in January to July 2023.

Imports of methanol into Poland totalled 382,308 tons in January to July this year versus 556,017 tons in January to July 2022 with Russia reducing shipments from 421,894 tons to 185,561 tons.   Average prices amounted to €297.2 per ton against €374.9 per ton last year.  Poland has been developing alternative sources to Russian methanol before the full embargo took full effect in June.  Apart from Venezuela and Belgium, other new sources arrived this year from the US and Trinidad.    

Exports of methanol from Poland amounted to 184,401 tons in January to July against 248,838 tons in January to July 2022.  Revenues from Polish exports of methanol rose from €106.0 million in the first seven months in 2022 to €70.2 million in January to July 2023, with export prices dropping from €436.5 per ton to €377.1 per ton.  Ukraine imported 13,234 tons of methanol from Poland in the first seven months.

Methanol imports into Hungary in the first six months in 2023 increased to 49,640 tons against 39,235 tons in the same period in 2022.  Imports from Russia dropped from 10,763 tons to zero and from Slovakia from 8,399 tons to 4,591 tons. 

The largest suppliers to the Hungarian market this year included Germany which provided 14,737 tons in January to June and the Netherlands which supplied 15,068 tons.  Average prices amounted to €446.8 per ton this year against €471.6 in 2022.

PCC Rokita Jan-Jun 2023

In the first half of 2023, the PCC Rokita’s profit dropped by 35%, whilst sales revenues dropped by 5% to zl 1.34 billion.  The EBITDA of zl 2023.305 million in the first half of 1, down nearly 18 percent year-on-year, and net profit of zl 161.3 million, down by almost 30 percent year-on-year.  The first half of 2023 was a less favourable period for the PCC Rokita. 

Both the macroeconomic situation and the market of energy raw materials and electricity may worsen the competitiveness of European chemical companies against the intensifying activities of Asian producers.  In the second quarter of this year, there was a maintenance shutdown of production installations, but this year a small part of the renovation works was moved to July.

In the first half of 2023 profitability of polyol production and sales fell to levels not seen for some time.  The difficult situation on the polyurethane market continues, but also other chemical products were affected in the first half in 2023 with no sign of an upturn in the near future. 

Regarding investments PCC Rokita is building a new plant at Brzeg Dolny, and the project is being run by PCC BD.   From its production structure PCC Rokita’s chlorine division was the most successful in the first half of 2023.  By contrast to the chlorine division PCC Rokita’s polyurethane segment recorded further declines.

PCC Exol Jan-Jun 2023

PCC Exol recorded lower sales in the first half in 2023 due to weak demand combined with oversupply of surfactants on the market.  In the second quarter, the group recorded only 225.7 zl million in revenue, zl 15.3 million in EBITDA and zl 5.1 million in net profit.  All these results fell sharply against the same period in 2023 respectively by 27.2%, 69.4% and 84.8%.

The surfactant market was difficult for PCC Exol in the first half of 2023, due to the decrease in demand and over-supply.  There was a trend of abandoning more expensive branded products in favour of cheaper substitutes. This limited sales specialty products, which usually provide quite high margins.

PCC Exol produces in two locations, Brzeg Dolny and Plock.  The current production potential capacity is estimated at 139-144,000 tpa including approximately 104,000 tpa at Brzeg Dolny and approximately 35,000-40,000 tpa at Plock, depending on the product range. 

Chimcomplex Jan-Jun 2023

Chimcomplex reported lower profits in the first half of 2023 largely due to lower production and a drop in sales by 34%.  The Romanian economy has seen weak demand this year whilst export opportunities have been constrained by recessionary trends in Europe. 

At the same time raw material and energy costs have dropped this year allowing Chimcomplex managed to register a net profit of €9.930 million against €30.726 million in the same period in 2022.  Revenues dropped from €263.7 million to €151.6 million whilst the EBITDA amounted to €25 million, with a margin of 15.6% of turnover.  This performance was achieved under the conditions of operating the company at half capacity.

Polyols accounted for 47.6% in total sales in the first half of 2023, whilst the chlorine sector accounted for 48.6%.   The company made considerable efforts to reduce costs and streamline operations in the first half of 2023. Expenses decreased significantly, reducing them by 49% for utilities (electricity, natural gas, water) and by 45% for all other raw materials. This contributed to an operating profit margin of 10%, despite the reduction in turnover.

Chimcomplex, being a medium-sized company in the European Union, managed to recover faster than the big players showing a solid adaptive capacity.  The company's strategy focuses on concrete goals, including decarbonization, harnessing hydrogen energy, developing renewable green energy and diversifying production.  The investments made in the first half of 2023 included the works for the completion of the largest high-efficiency cogeneration plant built in Romania in the last 11 years. The installation of the third cogeneration group of 16.6 MW increased the energy capacity to a total of 49.6 MWh, energy that can be used by Chimcomplex’s industrial platform at Ramnicu Valcea starting September 2023.

In the medium and long term Chimcomplex intends to focus on increasing the production capacity of polyols, developing projects to obtain methanol, ethylene oxide, monoethylene glycol, glycols as well as modernising the existing PVC plant.  The diversification of production by including new chemical products that Romania currently imports is another strategic objective.

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