Grupa Azoty reduces production in March and April after difficult first quarter in 2023 - Issue 391 || PKN Orlen-petrochemical production Jan-Apr 2023 - Issue 391 || Central European styrene trade Jan-Apr 2023 - Issue 391 || Polish polyethylene production & trade Jan-Apr 2023 - Issue 391 || Polish polypropylene production & trade Jan-Apr 2023 - Issue 391 || Polish synthetic rubber trade, Jan-Apr 2023 - Issue 391 || Central European MDI trade Jan-Apr 2023 - Issue 391 || Central European methanol trade Jan-Apr 2023 - Issue 391 || Russian chemical industry-new terminals required to serve Chinese market - Issue 391 || Russian butadiene production Jan-Apr 2023 - Issue 391 || Russian plastics and polyethylene production Jan-Apr 2023 - Issue 391 || Russian polyethylene trade Jan-Apr 2023 - Issue 391 || PTA deliveries from China to Kaliningrad - Issue 391 || Russian methanol production Jan-Apr 2023 - Issue 391 || Russian methanol exports, Jan-Apr 2023 - Issue 391 || Methanol plant at Volgograd signs agreement with Chinese company - Issue 391 || Russian polyurethane raw materials 2023 - Issue 391 || Uzbek methanol island-Air Products - Issue 391 || Russian Methanol Production, exports and domestic sales 2023 - Issue 392 || Polish petrochemical production Jan-May 2023 - Issue 392 || Olefin 111 project outline - Issue 392 || Polimex Mostostal and Naftoremont-Naftobudowa-Olefin 111 project - Issue 392 || Hungarian propylene exports Jan-Apr 2023 - Issue 392 || Central European styrene trade Jan-May 2023 - Issue 392 || Czech petrochemical trade, Jan-May 2023 - Issue 392 || Polish rubber trade Jan-May 2023 - Issue 392 || Hungarian TDI-MDI exports Jan-Feb 2023 - Issue 392 || Russian propylene exports & sales Jan-May 2023 - Issue 392 || KPI polypropylene outage & exports - Issue 392 || Russian methanol producer operational balances 2023 - Issue 396 || Russian Methanol Exports October 2023 - Issue 396 || Polish Polyol Exports 2022-2023 - Issue 396 || Polish Polyol Imports 2022-2023 - Issue 396 || Central European isocyanate trade Jan-Sep 2023 - Issue 396 || Czech polyol imports Jan-Sep 2023 - Issue 396 || Polish polyol trade Jan-Sep 2023 - Issue 396 || Isocyanate/polyol imports from China into Russia - Issue 396 ||
 


CIREC News December

Polish propylene & butadiene imports, Jan-Sep 22

Polish Imports of Propylene (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Lithuania

0.000

6.415

Bulgaria

5.015

0.000

Croatia

5.905

0.000

Germany

45.127

76.522

Russia

23.132

41.519

Ukraine

19.020

55.838

Hungary

3.918

0.000

Others

5.849

0.012

Total

107.967

180.306

Poland imported 107,967 tons of propylene in the first nine months in 2022 against 180,306 tons in the same period in 2021.   Imports have fallen this year due mainly to higher production at Plock. 

Average prices for propylene imports into Poland rose from €819 per ton in January to September 2021 to €1292 in the same period in 2022.  Prices started falling in the latter part of the third quarter following feedstock trends.     

Polish Butadiene Imports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Austria

23.794

33.130

Czech Republic

0.952

4.057

Germany

3.459

0.000

Hungary

16.491

27.222

Others

29.224

35.880

Total

73.925

100.288

Germany supplied 45,127 tons of propylene to Poland in the first nine months against 76,522 tons in 2021 whilst imports from Ukraine dropped from 55,838 tons to 19,020 tons.  Russia reduced shipments to 23,132 tons from 41,519 tons. Imports of propylene into Poland included 5,015 tons from Bulgaria and 5,905 tons from Croatia.

Butadiene imports into Poland totalled 73,925 tons in the first nine months in 2022 against 100,288 tons in the same period in 2021. The three largest suppliers comprised Hungary, Germany and Austria.   Styrene imports fell from 82,307 tons to 80,320 tons.  The Netherlands is the largest supplier of styrene to the Polish market, most of which is purchased by Synthos.

Hungarian propylene exports Jan-Aug 2022

Hungarian Propylene Exports (unit-kilo tons)

Country

Jan-Aug 22

Jan-Aug 21

Germany

4.283

4.748

Poland

3.918

0.000

Slovakia

42.153

68.171

Others

0.000

2.994

Total

50.354

75.912

Exports of propylene from Hungary dropped in the first eight months from 75,912 tons in January to September 2022 to 50,354 tons in the same period this year.  Exports to Slovakia from MOL to Slovnaft dropped from 68,171 tons to 42,153 tons which was due to lower production at Tiszaujvaros.

Czech petrochemical trade, Jan-Sep 2022

Czech Petrochemical Exports (unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Ethylene

10.298

18.719

Propylene

0.031

4.014

Butadiene

1.100

2.453

Benzene

29.186

35.006

Toluene

5.089

6.728

Ethylbenzene

79.271

83.929

Ethylene exports from the Czech Republic dropped from 18,719 tons in the first nine months in 2021 to 10,298 tons in the same period this year.  This included deliveries of 1,723 tons of ethylene sent to India, 3,268 tons to Germany and 3,266 tons to Slovakia. 

Czech imports of ethylene rose from 3,193 tons in the first nine months last year against 16,034 tons in January to September 2022.  Germany supplied 15,887 tons to the Czech Republic this year for €18.778 million, averaging €1.181 per ton. 

Czech Petrochemical Imports (unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Ethylene

16.034

3.193

Propylene

28.899

35.349

Butadiene

51.847

60.613

Benzene

55.135

57.987

Toluene

5.275

5.395

Styrene

13.020

55.560

Propylene imports into the Czech Republic dropped from 35,349 tons in the first nine months in 2021 to 28,899 tons in the same period in 2022, with main suppliers including Germany, Romania and Poland.  Czech imports of butadiene dropped from 60,813 tons in January-September 2021 to 51,847 tons in the same period in 2022.  Germany was the largest supplier, shipping 44,661 tons in January to September. 

Czech exports of ethylbenzene amounted to 79,271 tons in the first nine months against 83,929 tons in the same period in 2021.  All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group.  Benzene exports from the Czech Republic rose in the first nine months this year to 29,186 tons against 35,066 tons in the same period in 2021.  Germany was the primary market for Czech benzene exports, accounting for 21,279 tons for €21.388 million. 

Imports of benzene dropped slightly from 57,987 tons to 55,135 tons.  Czech benzene imports were sourced in the first nine months this year from Poland (21,742 tons for €24.940 million), Serbia (6,355 tons for €6.298 million) and Hungary (6,959 tons for €7.335 million).

Czech PVC exports Jan-Sep 2022

Czech PVC Exports

 

Jan-Sep 22

Jan-Sep 21

Vol ktons

91.2

95.3

Value € mil

156.6

107.4

Spolana exported 78,823 tons of PVC in the first nine months this year against 95,310 tons in the same period in 2021.  Revenues from PVC exports increased from €107.401 million to €156.638 million, after average prices rose from €1113 per ton to €1717 per ton. 

Italy was the largest destination for Spolana’s exports this year, after shipments to Poland reduced from 23,132 tons in January to September 2021 to 31,347 tons.  In order to support PVC production at Neratovice the Czech Republic imported 59,900 tons of ethylene dichloride from Germany in the first nine months in 2022 versus 38,209 tons in the same period in 2021.

Polish polyethylene trade Jan-Sep 2022

Polish Polyethylene Trade

Exports

Jan-Sep 22

Jan-Sep 21

Vol (kilo tons)

260,458

285,115

Value (€ million)

436,422

399,259

 

Imports

Jan-Sep 22

Jan-Sep 21

Vol (kilo tons)

1008.351

1051.376

Value (€ million)

1840.204

1568.732

Polish imports of polyethylene totalled 1.003 million tons in the first nine months in 2022 against 1.051 million tons in the same period in 2021.  Average prices for polyethylene imports into Poland rose to €1986.8 per ton in the first nine months in 2022 against €1492.1 in the same period in 2021.

Polish PE Exports (unit-kilo tons)

Category

Category

Category

LDPE

LDPE

LDPE

LLDPE

LLDPE

LLDPE

HDPE

HDPE

HDPE

EVA

EVA

EVA

EAC

EAC

EAC

Other

Other

Other

Total

Total

Total

Polish PE Imports (unit-kilo tons)

Category

Category

Category

LDPE

LDPE

LDPE

LLDPE

LLDPE

LLDPE

HDPE

HDPE

HDPE

EVA

EVA

EVA

EAC

EAC

EAC

Other

Other

Other

Total

Total

Total

Costs of polyethylene imports amounted to €1.840 billion in January to September 2022 against €1.568 million.  HDPE is the largest category of imported polyethylene into Poland, amounting to 347,691 tons in the first nine months this year versus 361,082 tons in January to September 2021. 

Polish polyethylene exports amounted to 269,599 tons in the first nine months in 2022 versus 332,107 tons in the same period in 2021; the rise due to higher production. 

Average prices for polyethylene exports into Poland rose to €1675.67 per ton in the first nine months in 2022 against €1400.3 in the same period in 2021.  Revenues from exports increased from €399.259 million in January to September 2021 to €436.422 million in 2022.

Orlen-LDPE project assessment

PKN Orlen is currently undertaking assessment for the construction of a new LDPE plant at Plock.  Thus far, it has signed a license and base project agreement with LyondellBasell.  Lupotech T technology provided by LyondellBasell accounts for more than 14 million tpa of LDPE/EVA polymer globally based on more than 70 production lines.  The capacity of the new unit is expected to be 250,000 tpa.  Orlen’s LDPE market share increased this year through the acquisition of the assets from Basell Orlen Polyolefins (BOP). 

After the conclusion of the BOP purchase PKN Orlen will become the sole producer of LDPE in Poland, covering about a third of the domestic demand.  Overall, the market is dominated by imports which amounted to 152,483 tons in the first nine months in 2022 against 146,754 tons in the same period in 2021. 

Poland is also the largest consumer of LDPE polyethylene in Central Europe.  According to forecasts, in 2025 the LDPE market in Central Europe will grow to approximately 890,000 tons, including around 312,000 tons for Poland against around 300,000 tpa at present. 

Polish polpropylene trade Jan-Sep 2022

Polish PP Exports (unit-kilo tons)

Category

Jan-Sep 22

Jan-Sep 21

PP homo

150.885

139.822

Polyisobutylene

0.215

0.453

Propylene copolymers

65.243

52.906

Other

4.911

2.407

Total

221.254

195.589

Av €/ton

1782.445

1463.821

Polish PP Imports (unit-kilo tons)

Category

Jan-Sep 22

Jan-Sep 21

PP homo

467.892

547.785

Polyisobutylene

2.977

3.226

Propylene copolymers

229.059

250.681

Other

15.632

18.832

Total

715.560

820.524

Av €/ton

1843.087

1541.303

Polish polypropylene imports, including homo grade and copolymers, fell in the first three quarters to a total of 715,660 tons versus 820,524 tons in the same period in 2021.  Average prices per ton increased from €1541.3 per ton to €1843.1 per ton.  Homo grade polypropylene dropped from 547,785 tons to 467,892 tons whilst copolymer imports dropped from 250,681 tons to 229,059 tons.  Regarding export activity shipments increased to 221,254 tons for €394.373 million against 195,588 tons in January to September 2021 for €286.307 million.

In addition to the dependency on propylene monomer imports, Poland has in recent years been increasing its imports of polypropylene and propylene copolymers.  Imports of polypropylene from Russia were one of the main sources in 2021, amounting to 155,805 tons from a total of 727,232 tons.  In value terms this amounted to €198.656 million from a total value of €1100.731 million.  This year the position has changed due to the economic impact resulting from Russia’s invasion of Ukraine.  Imports of polypropylene from Russia into Poland have fallen in recent months to less than 200 tons in July.

Polimery Police start-up targeted for first half of 2023

Polimery Police-Design, Procurement, etc

             Month

% Progress

Jan 22

83%

Apr 22

90%

Aug 22

97%

Sep 22

99.9%

The overall material progress of the Polimery Police project carried out under the EPC contract had reached 97% by the end of the third quarter.  The construction of the Polimery Police complex is being undertaken by Hyundai Engineering Company, which started the project in January 2020, with total  costs estimated in the range of $1.8 billion.   By the general material progress of the work including the design, procurement and delivery, the overall progress rate at the end of September amounted to 99.99%.   

In the third quarter this year, a range of engineering tasks were undertaken including hydrotesting of  above ground and underground pipelines, cabling, electrical equipment and automation.  On the territory of the transhipment and storage terminal, painting and insulation works on propane and ethylene storage tanks were completed.

Gryfilen, as Grupa Azoty informs on its official website, is the trade name for polypropylene that will sold from the Polimery Police plant.  . Grupa Azoty Polyolefins S.A. will be responsible for the production.  The Polimery Police project will enable the diversification of Grupa Azoty’s  business activities and help to meet demand in the Polish plastics segment.  Production is based on capacities of 429,000 tpa of propylene and 437,000 tpa of polypropylene.  At current progress rates, the aim is to start production in the first quarter in 2023.  The scope of the project also includes a gas port, a transhipment and storage terminal, providing the possibility of obtaining the raw materials necessary for the production by sea.

Czech polyethylene trade Jan-Sep 2022

Orlen Unipetrol Polyolefin Exports

HDPE

Jan-Sep 22

Jan-Sep 21

Vol (ktons)

269.112

239.602

Value (€ mil)

430.935

328.898

Av € per ton

1.601

1.373

 

PP

Jan-Sep 22

Jan-Sep 21

Vol (ktons)

192.064

206.629

Value (€ mil)

329.619

283.153

Av € per ton

1.716

1.370

As illustrated in the graphic opposite prices for Czech polyethylene trade peaked around June-July this year with subsequent declines seen over the third quarter.   These price trends are replicated elsewhere in Europe.   

Czech HDPE exports increased in the first nine months to 269,112 tons against 239,602 tons in the same period in 2021, with revenues amounting to €430.935 million up from €328.898 million.  Although polypropylene exports dropped by volume from 206,629 tons to 192,064 tons, values rose from €283.153 million in January to September 2021 to €329.619 million this year. 

Czech Polyethylene Trade (unit-kilo tons)

Trade Flow

Jan-Sep 22

Jan-Sep 21

Exports

308.907

284.986

Imports

238.949

259.842

For imports of all forms of polyethylene, Czech inward shipments dropped from 259,842 tons in the period January to September 2021 to 238,949 tons in 2022.  Exports of polyethylene totalled 308,907 tons in the first three quarters, up from 284,986 tons.  Due to higher production this year at Orlen Litvinov exports of polyethylene have been higher and imports lower.   

Rompetrol Rafinare-petrochemicals division Jan-Sep 2022

 

Rompetrol Rafinare Polymer Division

(unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Propylene processed

92

74

Ethylene processed

31

27

Polymer production

94

73

Polymer sales

106

89

Rompetrol Rafinare Polymer Division

($ million)

 

Jan-Sep 22

Jan-Sep 21

Turnover

166.4

146.3

EBITDA

46.3

10.0

Net profit

63.0

5.5

Rompetrol Rafinare sold 106,000 tons of petrochemicals in the first nine months in 2022, against 89,000 tons in the same period in 2021.  Rompetrol Rafinare increased polymer processing from 73,000 tons in January to September 2021 to 94,000 tons in the same period in 2022.  Polymer processing increased from shipped around 57% of its petrochemical sales in the first half of 2022 to the Romanian domestic market followed by 15% to the Bulgarian market.  Rompetrol Rafinare has set a minimum target of 87,100 tons of polypropylene sales for the whole of 2022. 

Hungarian polymer exports Jan-Aug 2022

Hungarian Exports of Polymers (unit-kilo tons)

Product

Jan-Aug 22

Jan-Aug 21

LDPE

60.455

77.258

HDPE

151.472

196.578

EVA

0.087

0.074

EAO

0.279

2.599

Other PE

3.560

2.599

PP-Homo grade

80.887

76.410

Propylene Copolymers

65.914

80.634

PVC

163.941

184.420

MDI

138.257

149.591

SBR

21.112

9.654

Hungarian exports of polyolefins, polystyrene and PVC all increased in value in the first three quarter in 2022, although overall volumes have been lower due to lower production at Tiszaujvaros.  LDPE export prices from Hungary rose in the first three quarters to €1734 per ton on average measured against €1502 in the same period in 2021. 

HDPE prices rose from €1380 per ton to €1675 per ton, with volumes dropping from 196,578 tons to 151,472 tons.   Polyolefin production at Tiszaujvaros was lower in the first three quarters in 2022 due to maintenance.  MOL exports most of its HDPE production whilst LDPE is sold more on the domestic market. 

Further maintenance on MOL’s petrochemical facilities took place in August, thus affecting olefin and polyolefin production in the third quarter.  Slovnaft in Slovakia has also undertaken shutdowns in recent months which have limited production this year. 

Hungarian Imports of Polymers

Product

Jan-Aug 22

Jan-Aug 21

LDPE

53.892

52.177

HDPE

69.055

67.632

EVA

4.021

3.531

EAO

8.021

8.213

PP-Homo grade

1.406

1.833

Propylene Copolymers

10.869

9.077

Exp PS

29.573

22.443

GPPS

12.784

26.879

SAN

18.825

7.914

ABS

57.431

29.566

Over the first nine months this year Slovak exports of polyethylene to the Czech Republic totalled 14,810 tons against 19,076 tons in the same period in 2021.  Slovnaft produced 267,000 tons of polypropylene in 2021 against 264,000 tons in 2020, whilst LDPE production rose from 190,000 tons to 195,000 tons.  Polyolefin production increased in 2021 due to higher demand resulting from COVID.  Around 90% of polymer sales are sent by Slovnaft for export, mainly to Central European countries. 

HIP-Petrohemija-PE exports and feedstocks

HIP Petrohemija exported 82,000 tons of polyethylene in the first eight months in 2022 against 80,000 tons last year, whilst sales revenues rose from increased from $128.7 million to $143.4 million.   Average prices per ton rose from $1608 to $1729 in 2022. 

Having been taken over by NIS last year feedstocks now represent the main concern for HIP Petrohemija, due to the Russian ownership of NIS.  Serbia is considering a move to retake majority control of NIS from Russia’s Gazprom Neft as it rushes to protect itself from the impact of sanctions.  From December EU sanctions mean Croatia will be barred from transporting Russian oil shipments to Serbia.  Thus there is urgency behind the Serbian government’s attempts to find out sources of crude.

Synthetic rubber prices Jan-Sep 2022

Central European synthetic rubber export and import prices showed strong rises over the course of the first nine months, although the market numbers may have already peaked.  Export prices for Czech shipments increased from €1824 per ton in January to €2516 per ton in September whilst import prices rose more modestly from €2182 to €2288.  However, import prices had achieved €2384 per ton in July and thus declined in both August to September.  By contrast average prices for Czech exports jumped sharply over the third quarter, rising 10.3% over the three months.  Partly this rise can be attributed to the delayed impact from feedstock costs but from October export numbers have started to follow import numbers downwards.

Czech Exports of Butadiene Rubber 2022

 

Q1 22

Q2 22

Q3 22

Volume (Ktons)

28.309

28.588

26.583

Value (€ million)

51.849

63.919

64.739

Av € per ton

1.832

2.236

2.435

Synthetic rubber futures in Europe continued to fall during the last week of October, with all commodities registering week-on-week declines throughout the entire month.  Butadiene prices fell back by 6% at the end of October followed by butadiene rubber which saw a 4.2% drop in the last week of the month.  EPDM rubber saw the smallest decrease of just under 1%, while styrene butadiene rubber was down 3.4% week-on-week.  Butadiene rubber export prices from the Czech Republic rose from €1832 per ton in the first quarter to €2435 in the third quarter but are now showing declines in the fourth quarter.

Czech exports of synthetic rubber amounted to 147,826 tons in the first nine months in 2022 versus 158.589 tons in the same period in 2021.  Imports rose slightly from 121,507 tons to 123,000 tons in January-September 2022.  Natural rubber imports dropped from 72,427 tons in the first three quarters in 2021 to 61,994 tons.  

Czech Exports of ESBR 2022

 

Q1 22

Q2 22

Q3 22

Volume (Ktons)

20.813

19.411

13.595

Value (€ million)

35.917

40.747

30.390

Av € per ton

1.726

2.099

2.235

Sanctions on Russia have started to affect imports of certain grades of synthetic rubber, particularly butadiene rubber and halogenated butyl rubber.  For both products EU sanctions have been applied from 10 July.  For butadiene rubber there are alternative suppliers able to fill the market gaps.  However, buying halogenated rubber (HBR) is far more complicated as the Russian producer Nizhnekamskneftekhim is only one of three producers globally.  HBR is used in the manufacture of tubeless tyres and is one of the most types of synthetic rubber.  Czech imports amounted to 4,866 tons in January to September 2022 for €12.403 million.  Russia supplied 3,572 tons, or 73% of total imports, nearly all of which was supplied in the first half of the year.

Regarding exports of synthetic rubber, Czech shipments of EBSR dropped in the third quarter to 13,595 tons against 19,411 tons in the second quarter and 20,813 tons in the first three months.  The decline is attributed to reduced production at Kralupy after Synthos announced reduced utilisation rates at its three plants in Central Europe due to higher production costs.

Synthos-production & outlook Jan-Sep 2022

Synthos Production (unit-kilo tons)

 Product

Jan-Sep 22

Jan-Sep 21

Polystyrene

52.9

53.9

EPS

76.1

79.1

Synthetic Rubber

208.0

210.8

Polish Synthetic Rubber Imports (unit-kilo tons)

Product

Q1 22

Q2 22

Q3 22

ESBR

13.923

7.958

9.683

S-SBR

7.417

5.489

6.784

Butadiene Rubber

11.584

17.118

15.898

Butyl Rubber

1.035

1.078

0.684

HBR

3.780

5.269

3.155

NBR

3.597

4.335

3.200

Isoprene Rubber

10.396

8.097

6.243

EPDM

11.712

12.857

10.882

Others

14.870

14.907

14.591

Total

78.313

77.108

71.119

       

Polish Synthetic Rubber Imports from Russia

(unit-kilo tons)

Product

Q1 22

Q2 22

Q3 22

ESBR

9.622

2.423

2.811

S-SBR

0.081

0.000

0.000

Butadiene Rubber

3.882

9.692

4.923

Butyl Rubber

0.215

0.266

0.179

HBR

3.688

5.143

2.850

NBR

2.197

2.493

1.154

Isoprene Rubber

10.286

7.876

5.878

EPDM

0.110

0.132

0.000

Others

12.518

12.782

6.091

Total

42.599

40.807

23.885

Production volumes for Synthos in Poland were slightly down this year in the first three quarters for general purpose polystyrene. EPS and synthetic rubber.  Synthetic rubber production at Oswiecim rose in the first nine months rose from 160,000 tons to 163,800 tons.    Synthos reduced production of general polystyrene at Oswiecim in the first nine months this year from 42,500 tons to 40,300 tons in 2022, whilst expandible polystyrene increased from 58,100 to 58,400 tons. 

Achieving profit targets from production this year has been highly challenging for Synthos in the face of rising energy costs and weaker demand.  In the synthetic rubber division, the tight butadiene spread has led to reduced operating rates which should be reflected in fourth quarter data.  Synthos has stated that it aims to reduce ESBR production until further notice, while production of solution-SBR and butadiene rubber will continue as planned.  Synthos manufactures ESBR at all three of its production sites in Oswiecim, Kralupy nad Vltavou, and Schkopau.  If the reduction in ESBR production is extended over a 12-month period at its three sites, it could equate to around a loss of 100,000 tpa.

Central European rubber trade 2022

In the first nine months in 2022 Poland exported a total of 230,684 tons of synthetic rubber for a total cost of €462.755 million against 250,917 tons in the same period for €374.442 million.  The largest category of synthetic rubber included the group of styrene-butadiene-styrene block co-polymers which amounted to 179,243 tons in January to September 2022. 

From the Kralupy plant in the Czech Republic Synthos exported 147,825 tons of synthetic rubber in the first nine months for €315.633 million versus 155,589 tons in the same period in 2021 for €245.330 million.  In the first three quarters in 2022 Synthos exported 104,261 tons of ESBR from Oswiecim for a total value of €129.011 million and from Kralupy 61,838 tons for a total value of €91.684 million.

Butadiene imports into Central Europe from Russia showed no signs of sanctions impact in the first half of the year although the sanctions did not take effect until 10 July.  The introduction of sanctions on butadiene rubber is creating a gap in the market and has encouraged Synthos to revive production at the idled plant at Schkopau which it acquired under the Trinseo acquisition.

Hungarian Imports of Synthetic Rubber (unit-kilo tons)

 

Jan-Sep 22

Jan-Sep 21

Total imports

87.242

108.741

From Russia

28.223

38.163

     
 

Jan-Sep 22

Jan-Sep 21

Total imports of butadiene rubber

29.841

29.604

Total imports of HBR

10.863

16.51

     
 

Jan-Sep 22

Jan-Sep 21

Imports of butadiene rubber from Russia

12.083

11.322

Imports of HBR rubber from Russia

9.378

13.841

Poland imported a total of 44,600 tons of butadiene rubber in the first three quarters in 2022, which was up from 33,690 tons in the same period in 2021.  Imports from Russia increased in the first three quarters from supplied 13,855 tons in January to September last year to 18,497 tons, most of which was supplied in the first half of 2022. 

Hungarian imports of butadiene rubber increased in the first half this year to 22,697 tons against 19,367 tons of which Russia supplied 9,226 tons.  Czech imports of butadiene rubber dropped to 22,849 tons in the first nine months of 2022 from 25,708 tons in 2021, with Russia supplying 9,731 tons. 

The fall of imports into the Czech Republic corresponds with rise in exports of butadiene rubber from 53,877 tons in the first nine months in 2021 to 56,897 tons in the same period this year.  Revenues from butadiene exports increased from €74.731 million to €115.769 million.  The largest customer for Czech butadiene rubber is India which took 17,345 tons in the first nine months in 2022 for €35.068 million.  The largest European consumer was Poland taking 11,321 tons for €23.037 million followed by Slovakia with 7,605 tons for €15.599 million.

In the first three quarters this year Hungary imported 10,862 tons of halogenated butyl rubber (HBR) of which Russia provided 86%.  Nearly all of the Russian shipments to Hungary were delivered in the first seven months in 2022.  Belgium was the second largest supplier, from ExxonMobil, and volumes are expected to increase from this source over the next few months. 

Nokian new tyre project Romania

Polish Tyre Production (unit-kilo tons)

 

Jan-Sep 22

Jan-Sep 21

Car Tyres

225.2

226.3

Bus & truck Tyres

165.8

163.4

Tractor tyres

9.2

7.3

Others

22.7

27.4

Total

423.0

424.3

In order to replace divestment of the Russian tyre plant Nokian Tyres intends to invest in a new passenger car tyre plant to be constructed at Oradea in the North-West of Romania, near the Hungarian border. The annual capacity of the factory will be 6 million tyres.  The total investment is estimated to be approximately €650 million. Construction is scheduled to begin in early 2023 and the first tyres are estimated to be produced in the second half of 2024. Commercial tyre production is expected to start in early 2025. 

Nokian is committed to building a zero CO2 emission factory utilizing green energy produced near the site.  Due to the war and the subsequent, tightening sanctions it was no longer feasible nor sustainable for Nokian Tyres to continue operations in Russia.  Besides the greenfield investment at Oradea Nokian Tyres continues to increase capacity at its factories in Finland and the US.

Grupa Azoty Pulawy restarts melamine and caprolactam production

Grupa Azoty Pulawy decided to resume the production of melamine on 27 October by launching the Melamine III and caprolactam installations. Due to high gas prices, the installations were shut down in August.  The decline of prices since then has enabled production to resume but probably at reduced capacity levels. The maximum production capacity for melamine at Pulawy is 270 tons per day.  Regarding other facilities, the company decided on 12 October to restart the nitrogen fertiliser production.

Grupa Azoty Q3 & full year results

The increase in gas prices and the related partial suspension of production affected Grupa Azoty's financial results in the third quarter, offsetting the strong results in the first two quarters.  Despite huge rises in revenues for fertilisers, plastics chemicals due to gas and energy costs, the company ended the third quarter in the red. 

Polish Chemical Production (unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Caustic Soda Liquid

307.9

258.8

Caustic Soda Solid

47.2

61.8

Caprolactam

107.1

120.9

Acetic Acid

1.8

3.9

Polystyrene

52.9

53.9

EPS

76.1

79.1

PVC

220.0

147.8

Synthetic Rubber

208.0

210.8

Ammonia (Gaseous)

1636.0

1943.0

Ammonia (Liquid)

76.8

80.1

Pesticides

51.6

51.8

Nitric Acid

1568.0

1827.0

Nitrogen Fertilisers

1367.0

1555.0

Phosphate Fertilisers

253.0

377.8

Potassium Fertilisers

247.0

265.0

During this period the production of fertilisers was temporarily reduced at Tarnow, Kedzierzyn Kozle and Pulawy. The fourth main plant at Police worked normally as it produces compound fertilisers based on raw materials other than gas.

Grupa Azoty Financial Indicators (€ billion)

 

Jan-Sep 22

Jan-Sep 21

Revenue

4.170

2.285

Operating profit

0.490

0.107

Profit before tax

0.424

0.087

Net profit

0.342

0.059

For the first three quarters Grupa Azoty generated consolidated sales revenues of zl 19,551 million (€4.254 billion) which is zl 9 billion (€1.92 billion) higher than in 2021.  For the first three quarters the EBITDA margin amounted to 14.5%, the first half’s strong margins counterbalanced by only 4.2% in the third quarter.  Overall Azoty’s net profit amounted to €342 million in January to September 2022 against €59 million in the same period last year.

The chemicals division recorded an increase in EBITDA in the first nine months despite the fact that operating costs exceeded revenues in the third quarter.  Higher prices for propylene persisted longer than derivative prices including 2-EH where prices fell 10% over the three-month period.  2-EH is a major product for Grupa Azoty Kedzierzyn which encountered a downturn in demand in the third quarter.

Grupa Azoty's Chemical Division (€ million)

 

Jan-Sep 22

Jan-Sep 21

Revenues

1479.7

778.0

Operating Costs

-1322.0

-731.0

EBITDA

172.1

47.6

Contract prices for propylene rose 19% in the third quarter compared with the same period in 2021 but were 16% lower relative to the second quarter of 2022.  The short-term forecast is for propylene prices to trend downwards mainly due to the continuing low demand. 

As regards propylene, supplies from Russia were fully replaced with supplies from alternative sources. As at the date of authorisation of these financial statements for issue, the sanctions did not have any impact on deliveries to the Group companies and no production constraints were identified.  The bulk of the Group’s purchases of propylene are made under annual contracts, with supplementary purchases made on the spot market.

MOL’s polyol project in Hungary

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.  As matters stand, MOL aims to complete the 200,000 tpa polyol project in the first 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, and frequently the last part of such a large project can be the hardest.

Czech MDI imports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

China

2.322

1.908

Belgium

9.122

9.583

Germany

11.759

11.404

Hungary

5.898

5.983

Netherlands

2.673

1.881

Others

0.917

3.011

Total

32.692

33.770

The polyol project for MOL represents a value chain extension.  Around $1.3 billion has been invested in the project where polyols provide a better return on capital than polypropylene, effectively €400-500 per ton in margins against €150.  Central European consumption of polyols is estimated at 250,000 tpa constituting around 15% of total European demand. 

Central European isocyanates, Jan-Sep 2022

MDI imports into the Czech Republic totalled 32,692 tons in the first nine months in 2022 against 33,770 tons in the same period in 2021.  Total costs for MDI imports into the Czech Republic dropped from €78.820 million in January to September 2021 to €73.362 million in the same period in 2022, with average prices dropping from €2.331 per ton to €2.244.  TDI imports into the Czech Republic amounted to 5,688 tons in the first nine months this year for a total cost of €20.569 million.

Polish MDI Imports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Germany

80.603

94.909

Netherlands

45.163

40.024

Hungary

76.062

87.568

Belgium

60.170

52.062

Saudi Arabia

5.279

8.137

Others

25.152

23.967

Total

292.429

306.666

Ktons delivered

110.694

144.542

Av Price Per Ton

2.642

2.122

MDI imports into Poland totalled 110,694 tons in the first nine months in 2022 against 144,542 tons in the same period in 2021.  Overall costs dropped from €306.666 million to €292.429 million, although average prices rose from €2122 per ton to €2642 in January to September 2022.  Germany was the largest supplier to the Polish market followed by Hungary.  Although MDI imports into Poland fell in the first nine months so did exports from Poland, dropping from 24,591 tons to 14,708 tons.  Hungary exported 116,750 tons of MDI in the first half of 2022 against 115,341 tons January to June 2021, with average prices rising from €2207 per ton to €2598 per ton this year. 

Polish TDI Imports

Country

Jan-Sep 22

Jan-Jul 21

€ million

156.524

137.184

Ktons

56.552

59.764

Av Price

2.768

2.295

TDI imports into Poland amounted to 56,552 tons in the first nine months in 2022 against 59,764 tons in the same period in 2021.  Values in January to September 2022 amounted to €156.336 million, equating to €2768 per ton, against €137.184 million in the first nine months in 2021 when prices averaged €2295 per ton. 

Hungarian TDI exports amounted to 170,282 tons in the first eight months of 2022 against 193,838 tons in the same period in 2021, whilst revenues from TDI shipments dropped from €465.924 million to €462.181 million.  Average prices per ton rose to €2707 from €2404 in the first eight months in 2021. 

PCC Rokita Jan-Sep 2022

Despite higher energy and raw material costs PCC Rokita increased its EBITDA in the first three quarters by 40% to zl 615 million (€131.4 million) and a rise of net profit by 64% to zl 388 million (€82.7 million).  Although polyols and polyurethanes represent the largest division for PCC Rokita’s production and sales, it has been the chloralkali division which has been the main driver of profitability this year.  The positive results were mainly influenced by the rising prices of chloro-alkali, and above all of soda lye. The chlorine division recorded a rise in EBITDA of 349% to zl 442.8 (€94.6 million) in the first three quarters this year against the same period in 2021.  The EBITDA profit margins for the chloralkali division amounted to 33.4% in the first three quarters, up from 14.3%.

PCC Rokita’s divisional sales by volume (unit-kilo tons)

Product Group

Jan-Sep 22

Jan-Sep 21

Polyurethanes

71.6

72.3

Chloralkalis

288.5

295.1

Chemical

20.2

21

PCC Rokita’s divisional sales by value (€ million)

Product Group

Jan-Sep 22

Jan-Sep 21

Polyurethanes

212.1

199.6

Chloralkalis

278.5

144.9

Chemical

41.7

30.2

PCC Rokita’s divisional prices (€ per ton)

Product Group

Jan-Sep 22

Jan-Sep 21

Polyurethanes

2.962

2.761

Chloralkalis

0.965

0.491

Chemical

2.064

1.438

The company continues the increased sales of chlorobenzenes compared to recent years, part of the market diversification.  This includes active sales of the product in the US due to the lease of a dedicated tank established on the East Coast in 2021. The company recorded an 11% higher sales volume compared to the same three quarters of 2021.  The continued high demand from the industries in which monochlorobenzene is used remained strong. 

The polyurethane segment by contrast recorded a fall of 52% in EBITDA in January to September this year to zl 135 million (€28.8 million).  At the beginning of 2023 PCC Rokita was operating at full capacity and the first quarter was relatively successful.   From the second quarter on, polyol prices began to drop significantly and only stopped falling in September.  Third quarter profitability dropped subsequently. 

The EBITDA profit margins for the polyurethane division amounted to 13.4% in the first three quarters down from 29.8% in the same period in 2021.  Net profits from the polyurethane sector dropped to zl 94.418 million (€20.1 million) in the first nine months from zl 179.919 last year.   The polyol market is facing some uncertainty in the second half of 2022 over demand and high costs. 

Costs of materials and energy accounted for 60.7% of all PCC Rokita’s costs in January to September this year.  The increase was mainly caused by higher costs for propylene oxide, ethylene oxide and benzene which have risen this year due to a range of external events, the most important of which includes Ukraine. 

 

The group is constructing a new plant at Brzeg Dolny.  This new plant is run by PCC BD, whose partners are PCC Rokita and PCC Exol.  The new installation is to produce a wide range of ethoxylates and polyether polyols, which can be widely used in numerous industries.  Products from this installation are to be characterized by lower emissions of volatile organic compounds, a shorter and low-waste production process, and some products will have a lower carbon footprint.  At the beginning of December, the companies informed that the installation will be used for the production of products manufactured using ethylene oxide, the deliveries of which will be carried out from 2024. 

 

The completion of the investment is expected in mid-2026.  The initially assumed average annual new potential production capacity with the assumed portfolio will amount to an estimated 50,000-55,000 tpa. 

PCC Exol Jan-Sep 2022

The three quarters of 2022 were the best period in history for the Group, both in terms of sales and generated profit.  Physical sales totalled 75,400 tons in the first three quarters, 1,200 tons higher than in the same period in 2021.  The installation for the production of oxyalkylates which was put into operation in the second half of 2021 helped increase sales volumes.

PCC Exol's divisional sales by volume (unit-kilo tons)

Product Group

Jan-Sep 22

Jan-Sep 21

Surfactants for use in detergents and cosmetics

48.5

48.8

Surfactants for use in industry

25.9

25.3

     

PCC Exol's divisional sales by value (€ million)

Product Group

Jan-Sep 22

Jan-Sep 21

Surfactants for use in detergents and cosmetics

85.3

49.9

Surfactants for use in industry

73.7

48.3

     

PCC Exol's divisional prices (€ per ton)

Product Group

Jan-Sep 22

Jan-Sep 21

Surfactants for use in detergents and cosmetics

1.779

1.027

Surfactants for use in industry

2.845

1.906

Overall, for the first three quarters sales revenues for PCC Exol increased against the same period in 2021 by zl 327.9 million (€69.9 million) to a total of zl 902.7 million (€192.4 million).  Part of the increase this year is attributed to supply limitations in Europe which are still linked to the economic effects from the pandemic.   Moreover, in the third quarter in 2022, the supply of most surfactants on the European market significantly improved, which stabilised the market situation and inhibited further price increases. 

The third quarter was also noticeable for a price correction in ethylene oxide which is the main raw material for PCC Exol.  The company’s production is not energy-intensive, and thus the company's expenses for the purchase of electricity in three quarters of 2022 accounted for approximately 1.3% of the total purchase of materials and raw materials.  In the first three quarters in 2022, the PCC Exol Group achieved a record net profit of zl 100.4 million (€21.5 million), improving last year's result by zl 65.2 million (€13.9 million) over 2021 or by 185%.

PCC Exol is currently working on the construction of a new unit ethoxylate 2 (ETE-2) plant at Plock which includes the production of non-ionic surfactants (ethoxylates). The project is expected to be completed estimated approximate time of completion of the investment is mid-2024.  After the completion of the investment, capacity at Plock will rise to 80,000 tpa.  

Chimcomplex, Jan-Sep 2022

Chimcomplex Financial Performance (€ million)

 

Jan-Sep 2022

Jan-Sep 2021

Revenues

381.4

345.3

Costs

339.4

275.7

Net Profit

165.7

282.7

Chimcomplex reported a net profit of €182 million in the first nine months in 2022, twice as low as in the same period of 2021.  Revenues increased 2.4% to 1.88 billion lei (€382.4 million) whilst costs increased by 23.7% to 1.67 billion lei (€339.4 million).  Operating expenses increased on the background of higher purchase prices for raw materials and utilities during the period January-September 2022.  Thus costs outweighed sales revenues as a result of the increase in electricity and natural gas prices, resulting in a temporary closure  on the  Borzesti industrial platform in August followed by some redundancies. 

Chimcomplex Product Sales

Jan-Sep 2022

Product Group

Share of Turnover

Polyols

56%

Chloralkalis

33%

Oxo Alcohols

3%

Chimcomplex continues to focus its activity on the polyol/polyethers and caustic soda sectors, which are the most profitable. Between January and September 2022, compared to the same period of last year, the share of caustic soda due to significantly higher prices. 

The fixed assets of the company increased by 18.4% as a result of the acquisition by public auction of the assets of CET Govora from the industrial platform from Ramnicu Valcea, of the investments made mainly at the Polyol Special plant. 

Chimcomplex launched its new polyol plant at Ramnicu Valcea on 21 July 2022.  The investment of €40 million, which is part of a wider investment project of €101 million, increases the company’s production capacity to over 187,000 tpa.   Other developments in the third quarter included the rehabilitations of the Electrolysis plant and through the acquisition of shares of the A6 Impex SA Dej company and of the company Sistemplast owned by UZUC SA. 

Chimcomplex is 85.2% controlled by CRC Alchemy Holding, a vehicle owned by businessman Stefan Vuza, while the Romanian state, through the Authority for State Assets Management, holds almost 9% of the share capital.  Chimcomplex is the only producer of polyurethane polyols in Romania and has oriented its development strategy towards technological efficiency, energy efficiency and green and sustainable chemistry.

Polish organic chemical trade Jan-Sep 2022

Polish Organic Chemical Trade

Exports

Jan-Sep 22

Jan-Sep 21

Vol (kilo tons)

1273.5

1108.0

Value (€ million)

1750.8

1234.0

Imports

Jan-Sep 22

Jan-Sep 21

Vol (kilo tons)

2329.0

2320.9

Value (€ million)

3922.2

2947.4

Imports of organic chemicals into Poland amounted to €3.922 billion in value in the first nine months in 2022 for 2.329 million tons of products.  Export values rose to €1750.8 million in January to September for 1.274 million tons.   

Polish Organic Chemical Imports (unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Acetic Acid

34.432

34.499

Acetone

5.447

4.728

Adipic Acid

8.710

6.668

Butadiene

85.381

96.008

DEG

20.422

21.172

DINP/DOP

17.116

15.678

Ethyl Acetate

12.291

17.785

Ethylbenzene

75.623

99.806

Ethylene Glycol

40.007

38.152

Ethylene Oxide

10.084

21.517

Isopropanol

8.148

7.840

Lysine

45.058

41.077

Maleic Anhydride

10.292

12.422

Melamine

21.160

18.232

Methanol

704.968

524.994

Paraxylene

34.150

64.316

Phenol

79.864

30.616

Phthalic Anhydride

24.427

28.818

Propylene

107.949

182.127

Propylene Glycol

15.518

18.181

Propylene Oxide

1.830

3.962

PTA

1.446

46.992

Styrene

74.646

82.307

TDI

55.764

61.972

Toluene

18.251

16.820

VAM

13.468

13.889

High energy prices have played a key role in driving up values this year.  Imports of propylene and phenol from Russia have shown signs of decline since May, whilst methanol exports remain high in Poland’s new role as a regional conduit to other parts of Central Europe.  Methanol imports totalled 704,968 tons in the first nine months in 2022 against 524,994 tons in the same period in 2021.

Phenol imports into Poland have risen sharply this year, amounting to 79,864 tons in the first nine months in 2022 versus 30,616 tons last year.  Russia was one of the main suppliers of phenol this year in the first half of this year although volumes in May started to show signs of softening as EU sanctions were being introduced. In the first nine months phenol imports into Poland from Russia totalled 14,133 tons for a total value of €20.616 million which measured against 9,746 tons for the whole of 2021 for €10.732 million. 

Ethylene oxide imports into Poland totalled 10,084 tons in January to September 2022 down from 21,517 tons in the same period in 2021.  Poland stopped importing ethylene oxide from Russia in May this year.

For other organic chemical imports Poland took 34,432 tons of acetic acid in the first nine months in 2022 against 34,499 tons in the same period in 2021.  The UK was the leading supplier, shipping 11,222 tons for €13.220 million.

Ethyl acetate imports dropped from 17,785 tons in the first nine months last year to 12,291 tons this year, with Belgium providing the largest share of imports.  The second largest supplier was Ukraine, providing 1,453 tons although most of the product was shipped in the first quarter.  

Polish PTA trade  Jan-Sep 2022

Polish PTA Exports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Belarus

5.762

11.943

Germany

257.054

296.289

Lithuania

31.404

22.909

Switzerland

5.730

3.893

Turkey

5.984

0.000

Others

15.130

6.291

Total

321.064

341.325

PTA exports from Poland amounted to 321,064 tons in the first nine months in 2022 against 341,325 tons in the same period in 2021.  Average prices for Polish PTA exports in the first nine months amounted to €995 per ton.  PKN Orlen reduced PTA production in May due to some technical issues which followed on from April where the company delivered up to 75% of the minimum contract volumes.  Germany remained the main customer for Polish PTA, taking 257,054 tons in January to September 2022 against 296,289 tons in the same period in 2021.   Lithuania was the second largest destination for PTA export shipments, taking 31,404 tons. 

Central European methanol trade Jan-Sep 2022

Czech imports of methanol amounted to 57,233 tons in the first nine months against 61,825 tons in the same period in 2021.  Russia accounted for 23,014 tons in the first nine months down from 41,668 tons last year, according to Czech statistics.  

Czech Methanol Imports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Germany

4.807

8.700

Norway

0.764

0.000

Russia

23.014

41.668

Poland

27.618

17.404

Others

1.031

1.400

Total

57.233

61.825

Prices per ton for methanol imports into the Czech Republic increased from €350 in the first nine months in 2021 to €486 in the same period in 2022.

Polish Methanol Imports (unit-kilo tons)

Country

Jan-Sep 22

Jan-Sep 21

Azerbaijan

1.138

0.000

Belarus

0.044

2.620

Finland

50.816

58.013

Lithuania

0.856

7.011

Germany

77.491

64.210

Netherlands

0.650

25.739

Norway

16.787

18.497

Russia

554.087

337.587

Others

3.099

11.317

Total

704.968

524.994

Imports of methanol into Poland totalled 704,968 tons in the first nine months in 2022 against 524,994 tons in the same period in 2021.   Russia increased exports from 337,587 tons to 554,087 tons whilst Finland shipped 50,816 tons against 58,013 tons in January to September July 2021.    Germany increased exports to Poland in the first nine months to 77,491 tons from 64,210 tons in the previous year.  Import prices averaged €375 per ton in the first nine months. 

Poland Methanol Exports to Central Europe

Country

Q1 22

Q2 22

Q3 22

Austria

20.033

19.163

18.748

Czech

19.521

20.590

18.625

Germany

27.483

29.955

33.461

Romania

3.522

9.585

20.269

Slovakia

6.507

18.577

13.425

Ukraine

0.253

4.492

6.715

Hungary

5.815

18.940

13.293

Others

2.528

0.486

3.763

Total

83.134

121.303

124.536

Total Polish exports to Central amounted to 124,536 tons in the third quarter which means that for the full three quarters in 2022 Polish methanol trade (including exports and imports) exceeded one million tons.   Volumes are expected to continue until the end of the year and into the first week of January before sanctions would start to take effect.  Other sources will have to be found to replace the inward flows of Russian methanol which may not be so profitable for Polish traders. 

Exports of methanol from Poland amounted to 328,972 tons in the first nine months against 137,118 tons in January to September 2021.  Revenues from Polish exports of methanol rose from €47.5 million in January to September 2021 to €141.0 million in the same period in 2022, with export prices averaging €429 per ton against €347 per ton last year. 

Hungarian Methanol Imports (unit-kilo tons)

Country

Jan-Aug 22

Jan-Aug 21

Austria

1.238

2.549

Germany

8.626

1.094

Netherlands

6.233

1.776

Poland

12.805

0.309

Russia

10.763

35.555

Serbia

1.816

0.316

Slovakia

9.948

28.336

Others

1.381

14.504

Total

52.809

84.439

Export deliveries from Poland to Southeast Europe are expected to continue for the rest of this year, or as long as the Russian occupation of Ukraine prevents the railways from restarting.  Polish exports to Ukraine totalled only 253 tons in the first quarter but the second quarter saw 4,492 tons shipped and then 6,715 tons in the third quarter. 

Methanol imports into Hungary dropped from 84,439 tons in the first eight months in 2021 to 52,809 tons in the same period this year.  Imports from Russia dropped from 35,555 tons to 10,763 tons and from Slovakia from 28,336 tons to 9,948 tons.  Last year Serbia provided 13,947 tons from the Kikinda plant in the first eight months, but the plant has not operated this year Thus Hungary has imported from other sources including the Netherlands, Germany and Poland.

Orlen Group Jan-Sep 2022

Orlen Group Jan-Sep 2022 (€ billion)

 

Orlen Group

PKN Orlen

Sales Revenues

37.595

27.361

Operating Profit

6.099

2.371

The Orlen Group's total revenues increased by 95% in the first three quarters in 2022 to €37.595 billion compared to €19.837 billion in the same period in 2021.  This included €27.361 billion from PKN Orlen which is the largest individual company in the group.  The increase of sales revenues for the Orlen Group was driven by higher volume sales in all operating segments, combined with a 55% rise in crude oil prices.  The increase of sales revenues was also helped by the consolidation of Lotos.  The Orlen Group’s sales revenues in the third quarter amounted to €15.590 million which was €7.81 million higher than in in the same quarter last year.    

Operating costs for the Orlen Group increased by €14.490 billion over January to September 2021 to €32.270 billion, mainly as a result of an increase in the prices of basic raw materials and energy driven to a large extent by the ongoing Russian-Ukrainian war.  Other factors included the higher processing of crude oil by 4.5 million tons following the acquisition of Lotos.

The Orlen Group's model refining margin amounted to $16.4 per barrel in the third quarter against $26.5 in the second quarter.  PKN Orlen expects a temporary increase in refining margins on European markets in the coming quarters, while petrochemical margins remain at around €1,000 per ton.  The refining margin may benefit from an  increase in demand for diesel from the energy sector, which uses diesel as a substitute for natural gas.

Orlen-petrochemical production Jan-Sep 2022

PKN Orlen Production (unit-kilo tons)

 Product

Jan-Sep 22

Jan-Sep 21

 Ethylene

351.0

219.1

 Propylene

324.0

228.8

 Butadiene

47.7

26.7

 Toluene

6.0

8.5

 Phenol

33.1

35.5

 Polyethylene

190.2

85.5

Polypropylene

250.0

207.6

 Ethylene production for PKN Orlen in the first three quarters amounted to 351,000 tons against 219,100 tons in the same period in 2021.  Propylene production increased from 228,800 tons to 324,000 tons whilst butadiene production rose from 26,700 tons to 47,700 tons. 

In the polyolefin division the Orlen Group increased production of polyethylene from 85,500 tons in January to September 2021 to 190,200 tons in the same period this year whilst polypropylene increased from 207,600 tons to 250,000 tons. 

Orlen petrochemical revenues

Petrochemical revenues for the Orlen Group rose from €2.638 billion in January to September 2021 to €5.073 billion in the same period this year, whilst production costs increased from €2.379

PKN Orlen’s Petrochemical Division (€ billion)

 

Jan-Sep 22

Jan-Sep 21

Segment revenues

5.073

2.638

Costs

-4.615

-2.379

Operating profit/(loss) (EBITDA LIFO)

0.599

0.650

billion to €4.615 billion.  In the petrochemical sector ethylene prices rose by 38% over 2021 and propylene prices by 41%.

PKN Orlen Petrochemical Margins (€/ton)

Product

Q4 21

Q1 22

Q2 22

Q3 22

Ethylene

 715

 664

 810

 639

Propylene

 730

 679

 820

 598

Toluene

 153

 155

 450

 619

Benzene

 298

 333

 422

 429

Butadiene

 638

 410

 547

 614

Paraxylene

 344

 262

 393

 586

Orlen’s profitability increased more modestly in the petrochemical sector than in the refining sector.  Aside sharp rises in crude and other feedstock costs, revenues were helped by higher product sales rising in the first nine months in most product areas.

Ethylene margins dropped in the third quarter from €810 per ton to €639 whilst propylene fell from €820 per ton to €598.  Lower petrochemical margins for ethylene and propylene in the third quarter helped restrict margins for polyolefins.  At the same time butadiene margins rose from €547 per ton to €614, whilst benzene increased from €422 to €429.  Paraxylene margins showed the sharpest increase in the third quarter, rising from €393 per ton in the second quarter to €586 per ton.  

PKN Orlen Product Revenues (€ million)

Product group

Jan-Sep 22

Jan-Sep 21

Monomers

885.7

453.0

Polymers

760.5

427.7

Aromatics

332.9

206.9

Fertilisers

438.2

110.2

Plastics

519.4

281.6

PTA

447.4

255.0

 Revenues from ethylene, propylene and butadiene rose from €453.0 million in the first nine months in 2021 to €885.7 million in the same period this year, with polymers rising from €427.7 million in January to September 2021 to €760.5 million in 2022.  PTA revenues increased from €255.0 million in the first three quarters in 2021 to €447.4 million, with sales volumes rising from 287,000 tons to 330,000 tons. 

PKN Orlen Group Chemical Sales

(unit-kilo tons)

Product group

Jan-Sep 22

Jan-Sep 21

Monomers

689

525

Polymers

500

438

Aromatics

298

248

Fertilisers

723

877

Plastics

288

240

PTA

452

424

Ethylene sales for the Orlen Group amounted to 323,000 tons in the first nine months in 2022 against 222,000 tons in the same period last year whilst propylene sales rose from 303,000 tons to 374,000 tons. 

Overall. it meant that monomer sales rose from 525,000 tons in the first nine months in 2021 to 689,000 tons in the same period in 2022.  In the polymer division PKN Orlen is acquiring the LDPE business from Basell Orlen Polyolefins, which should be completed by the end of 2022.

MOL Jan-Sep 2022

MOL's Olefin & Polyolefin Production

(unit-kilo tons)

Product

Jan-Sep 22

Jan-Sep 21

Ethylene

490

632

Propylene

252

323

Butadiene

55

76

Raffinate

88

114

Product

Jan-Sep 22

Jan-Sep 21

LDPE

161

200

HDPE

222

301

PP

337

411

MOL reported a significant rise in third-quarter net profit and EBITDA, boosted by strong refining margins in spite of a government-imposed fuel price cap in Hungary.  MOL raised its EBITDA outlook for 2022 to about $4.1 billion-$4.4 billion from its previous guidance of $3.3 billion.  MOL's Danube refinery and Slovnaft’s Bratislava refinery both continue to receive Russian crude through the Druzhba pipeline as part of the exemptions permitted by the EU. Receiving cheap Russian Urals by pipeline has helped maintain high margins for MOL even though the Hungarian government has imposed windfall taxes on the company.

In the petrochemical division MOL’s production of olefins and polyolefins dropped in the first three quarters in 2022 due to extended maintenance.  Ethylene production at Tiszaujvaros and Bratislava dropped from 632,000 tons in January to September 2021 to 490,000 tons, whilst propylene fell from 323,000 tons to 252,000 tons and butadiene (produced only at Tiszaujvaros) fell from 76,000 tons to 55,000 tons.  Declines in propylene and butadiene production this year by MOL have affected the volume of Hungarian exports.   Polyethylene exports from MOL have also been limited by lower production in 2022.  MOL’s LDPE production fell from 200,000 tons to 161,000 tons and HDPE production fell from 301,000 tons to 222,000 tons.  Polypropylene production dropped in the first three quarters in 2021 from 411,000 tons to 337,000 tons in January to September 2022 although this decline did not affect export activity.

MOL's downstream EBITDA increased by 70% to $741.2 million in the third quarter, mainly driven by the refining sector.  This meant that MOL posted a quarterly net profit of 262.1 billion forints ($632.91 million), up from 119.3 billion in the third quarter of 2021.  The planned major maintenance of the Százhalombatta refinery was successfully completed in the Q3 period.

After a temporary rise in Q2 2022, the petrochemical margin decreased further in the third quarter.  The peak of petrochemical margins in 2021-2022 took place in Q2 2021 when €949 per ton was achieved but since then there has been downward trend.   Lower margins for petrochemicals translated into a lower EBITDA of Ft 19.9 billion for the third quarter, which is by far the weakest financial return for several years.

Refining margins and volumes

Most of the refineries in Central and South East Europe have reported record margin rises this year although processing volumes are only slightly higher than in 20221. Even though margins dipped in the third quarter against the second quarter, they remained much higher than in the comparative quarter in 2021.

OMV Petrom’s refining margin declined from $24.4 per barrel in Q2 to $17.1 in Q3 but was still higher than in Q3 2021 by $9.9.  After witnessing month by month declines in the third quarter PKN Orlen’s model refining margin rebounded to $31.4 per barrel in October versus $16.7 in September.  MOL continues to suppress its margins on a monthly basis, and now also on a quarterly basis.  Romanian refineries, including one owned by Russia’s Lukoil have found alternative fuel supplies from December when a ban on Russian imports takes hold.  The Petromidia refinery, owned by Rompetrol Rafinare, majority controlled by KMG International (KMGI) uses Kazak crude.   

The EU embargo on Russian seaborne crude deliveries comes into effect from 5 December, with some exemptions such as to Bulgaria, Slovakia and Hungary providing time to adapt to new sources.  Even though pipeline deliveries via the Druzhba have thus far been excluded from EU sanctions it is incumbent on those countries receiving Russian crude to seek out other forms of supply.  Not even deliveries via the Druzhba can be guaranteed as the constant artillery and missile bombardment occasionally damages the pipeline or related equipment.

Romanian refineries, margins and feedstocks

The Petromidia refinery processed 3.817 million tons of crude in the first nine months in 2022 against 3.326 million tons in the same period in 2021.  Rompetrol Rafinare recorded a gross turnover of $4.87 billion in the first three quarters and an operational profit (EBITDA) of $327 million, as a result of higher margins.

OMV-new aromatics investment

OMV Petrom is investing around €130 million in the next 3 years to build a new unit of aromatic products at Petrobrazi refinery. The processing capacity of the new unit is about 1,500 tons per day of reformed gasoline.   

The new unit of aromatic products will be put into operation in 2026. It will ensure continuity of production of gasoline with a benzene content of less than 1%, according to current European standards. At the same time, a larger amount of toluene will be possible to be obtained from the process of gasoline production. Toluene can be used to obtain commercial gasoline with improved octane number, but it can also be used as a solvent in the chemical industry to obtain paints, adhesives or in processes of obtaining leather products.

The Petrotel Ploiesti refinery, controlled by Lukoil, which would have stopped receiving Russian crude oil from December, has found an alternative supplier of crude oil.   Petrotel is the smallest of the three large refineries in Romania and has a refining capacity of about 2.7 million tpa of crude oil.   The refinery receives exclusively crude oil by sea from Constanta, whilst also taking crude oil from the Russian port of Novorossiysk.   Thus, the refinery would be subject to the oil embargo imposed by the Europeans from 5 December for Russian oil imported by sea.

OMV Petrom at its Petrobrazi refinery at Ploesti stopped importing Russian products in March in agreement with EU objectives.   The company continues to diversify energy import sources in order to secure its supply chain, including through booking LNG capacity.   The company produces around 75%-80% of the crude it processes at its Petrobrazi 4.5 million tpa refinery and of the natural gas it sells and uses to produce electricity.

NIS refining levels in Jan-Sep 2022 and possible nationalisation

Serbian refining company NIS increased its processing volume in first nine months of 2022 14% over the same period in 2021, and achieved the highest amount of crude since 2009.  For now, NIS can operate normally as its refineries have been retooled to handle oil from Iraq and other countries and because of Belgrade’s exemption from EU sanctions on Russian companies.  However, Serbia is considering a move to retake majority control of NIS from Russia’s Gazprom Neft as it rushes to protect itself from the impact of sanctions on Moscow.  From December EU sanctions mean Croatia will be barred from transporting Russian oil shipments to Serbia.

Central European Refining Volumes (unit-mil tons)

Company

Jan-Sep 22

Jan-Sep 21

INA

3.3

2.2

Lotos

6.0

7.3

Lukoil Bourgas

1.9

3.5

Lukoil Ploiesti

2.1

1.7

MOL

7.9

9.6

NIS

3.3

2.9

Orlen-Lietuva

5.7

5.0

Orlen-Plock

13.6

9.1

Petrom

3.4

3.5

Rompetrol

4.1

3.6

Slovnaft

2.0

2.8

Orlen Unipetrol

5.1

4.8

Total

58.1

55.9

Slovnaft to reduce Russian crude to about 60%

Slovnaft aims to cut the share of Russian oil in its processing activities next year to about 60% from about 95% at present and use other blends to comply with sanctions on Russia.  Slovnaft processes around 124,000 barrels per day and exports its products across central Europe, has been using Russian oil supplied by the Druzhba pipeline but is accelerating modifications to use other blends. 

Orlen Group and east Germany

Orlen Group’s crude oil throughput amounted to 10.5 million tons in the third quarter, of which PKN Orlen’s output was increased by 1.7 million tons by the inclusion of the Lotos Group.  Orlen Unipetrol achieved 300,000 tons more in the third quarter over the second quarter, as a result of operating of Kralupy and Litvinov refineries in a full production mode after maintenance shutdowns in 2Q22.  Orlen Lietuva in Lithuania increased throughput by 1.2 million tons in the third quarter due to completed maintenance in the second quarter. 

In eastern Germany the Schwedt refinery has started to take oil supplies from the Polish Naftoport which would enable the refinery to become independent of gas supplies from Russia.  Deliveries via Gdansk are possible and need to be increased as the refinery strives to relieve itself of any dependency from Russia crude.  At the same time Poland is seeking German support to apply EU sanctions on the Polish-German section of the Druzhba crude pipeline so Warsaw can abandon a deal to buy Russian oil next year without paying penalties.

Ukraine

Ukrainian new methanol contracts

The main Ukrainian methanol consumer Ukrgasvydobuvannya has sought contracts from Venezuela, Trinidad and Tobago, Azerbaijan and the EU for 2023.  In previous years, deliveries were from Russia and Belarus.   The new suppliers providing contracts include Caribbean Gas Chemical Limited, SOCAR, Mider-Helm and Supermetanol CA from Venezuela.  The contracts include restrictions about supplies from manufacturers that are under sanctions due to Russia's attack on Ukraine.  Prices in these contracts are much higher than previous years, when methanol of Russian and Belarusian production was supplied.

The previous contract of Ukrgasvydobuvannya in November 2021 included an indicative price of €450 per ton.  In 2019-2020, prices being paid were in the range of €250-300 per ton. Then the supplier was the Swiss intermediary company AGTG SA. 

The expected cost of the product according to the specified formula is 32,300 UAH per ton (€850), while its real cost, which is offered by companies’ residents of Ukraine, is about 22,000 UAH per ton (€579).  Although Ukraine is vehemently opposed to purchasing methanol directly from Russia it is quite difficult to prevent traders from sourcing Russian product in meeting Ukrainian contracts. 



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