Petrochemical industry in Russia

2024

The largest plant of polymer pipes in the Caucasus was opened to protect communication cables. 3 billion rubles invested in it

In September 2024, the largest polymer pipe plant in the North Caucasus was opened in the Suleiman-Stalsky district of Dagestan. The total investment in the project amounted to about ₽3 billion. The company was called "Exonor." Read more here

In the Tula region for 17 billion rubles launched the production of high molecular weight polymers

In August 2024, the production of high molecular weight polymers was launched in the Tula region, the total investment in which amounted to about ₽17 billion. The new production complex, located at the Polyplast Novomoskovsk enterprise, will be an important contribution to the development of the chemical industry in the region and will ensure the creation of more than 1,000 workplaces. Read more here

2023

The largest polyethylene producers in Russia are named

In 2023, 3536 thousand tons of ethylene polymers in primary forms were produced in Russia. This is 1.5% more compared to the previous year (3488 thousand tons). At the same time, the average annual increase (CAGR) in the output of these products during 2017-2023 amounted to 8.6%. Such data are given in the study of the audit and consulting group "Business Profile," the results of which were published on April 5, 2024.

According to the results of 2023, the Volga Federal District (Volga Federal District) became the largest region - the producer of polyethylene in Russia with a share of 46.8%. In second place is the Ural Federal District (UFO) with 35.7%, and the Siberian Federal District (Siberian Federal District) closes the top three with about 11%. Another 5% falls on the North-Western Federal District (NWFD).

source = Business Profile

In 2023, the top three in the production of low-density polyethylene (LDPE) in Russia included Tomskneftekhim, Kazanorgsintez and Ufaorgsintez. The largest suppliers of high density polyethylene (HDPE) are ZapSibNeftekhim, Kazanorgsintez and Stavrolen. ZapSibNeftekhim, Nizhnekamskneftekhim and Ufaorgsintez are the leading producers of polypropylene (PP).

The study also says that the leading Russian suppliers of polystyrene and shock-resistant polystyrene (PS and UPS) are Nizhnekamskneftekhim, Gazprom Neftekhim Salavat and Penoplex. In the segment of polyvinyl chloride suspension (PVC-C), the top three include Bashkir Soda Company, RusVinyl and Sayanskkhimplast. And the rating of polyethylene terephthalate (PET) manufacturers is headed by EcoPET, Polyef and Senezh New Polymer Plant.

Against the background of the current geopolitical situation in 2022 and 2023, Russian polymer manufacturers focused on the development of the domestic plastic processing market. At the same time, export shipments in the vast majority of segments began to decline.^[1]

Reducing polyethylene exports by a third to 740,000 tonnes

Russia in 2023 reduced exports of polyethylene by 35% compared to the previous year - to 740,000 tons. This was reported in May 2024 in the materials of the Analytical Center for the Fuel and Energy Complex (AC TEK).

The main reason for this dynamics was the growth in the processing of this polymer within the country and the partial transition of suppliers to serving the domestic market. The total production of polyethylene (mainly high density) in the Russian Federation in 2023 amounted to 3.23 million tons, which is 1% more than in 2022. At the same time, its processing within the country increased by almost 18% - to 2.9 million tons. Imports remained at the level of the previous year - 410 thousand tons.

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At the same time, the share of imported polyethylene in consumption in Russia has significantly decreased - from 18.7% in 2022 to 14.2% in 2023. The main supplier was South Korea. The export of polyethylene to EU countries has completely stopped due to anti-Russian sanctions.

According to Lola Ogrel, Project Director of AC Fuel and Energy Complex, the increase in polyethylene processing within the Russian Federation in 2023 is associated with an increase in the production of products from it - pipes for construction, films and packaging. The production of plastic pipes increased by 8%, films and sheets - by 8.1%, polymer bags - by 12%, bottles - by 18%.

In 2024, Russian polyethylene manufacturers operate with a high capacity load - up to 95-96%. The largest supplier to the domestic market (up to 75% of products) is Sibur. Further growth in output is expected after the launch of new complexes of this company and the Irkutsk Oil Company.

According to the estimates of the Analytical Center of the Fuel and Energy Complex and experts, in 2024, polyethylene consumption in the Russian Federation may increase by 3-7% due to economic growth and further import substitution in consumer industries. Production will grow slightly - by 1-4%. Export supplies are unlikely to grow much due to the need to close the growing domestic demand.^[2]

Increase in imports of large-tonnage polymers by 12% to 1 million tons

In 2023, Russian companies imported 1 million tons of large-tonnage polymers, which is 12% more than a year earlier. Such data in the analytical publishing house Plastinfo was published on January 23, 2024.

According to the Interfax news agency, citing Plastinfo materials, the export of polymers (excluding the countries of the Customs Union) from Russia amounted to 1.3 million tons, which is 24.8% less than a year ago. Deliveries abroad of high-density polyethylene (HDPE), polystyrene (PS) and suspended polyvinyl chloride (PVC-C) sank the most.

Russian companies imported 1 million large-tonnage polymers

Plastinfo estimated the volume of production of large-tonnage polymers in Russia at 7.4 million tons at the end of 2023. This is 3.1% higher than the result of 2022. The bulk of the production was polypropylene (PP) and polyethylene terephthalate (PET).

The visible consumption in Russia of seven large-tonnage polymers (polyethylene (LDPE, HDPE, LLDPE), polypropylene (PP), polystyrene (PSON, PPS, PS-B), polyvinyl chloride (PVC-C, without PVC-E) and polyethylene terephthalate (PET)) for 2023 compared to 2022 increased by 12% and amounted to 7.1 million tons (with a forecast for December - Plastro).

According to them, in 2023 the total share of imports in consumption did not change compared to 2022 - 15%. At the same time, there are still changes in individual polymers. Thus, the share of imported grades of low-density polyethylene (LDPE) in consumption increased from 14.2% to 16%, HDPE - increased from 10.8% to 11.6%, PP - increased from 9.7% to 13.6%, PS - increased from 3.7% to 7.8%. The share of PVC-C of foreign production in consumption, on the contrary, decreased - from 11.2% to 7.2%, the share of foreign PET also decreased - from 31.5% to 30%, the study notes.^[3]

2022

Polyethylene Market Volume Decline of 8.2% to 2.5 MTA

Sales of polyethylene in primary form in Russia in 2022 amounted to 2.58 million tons, which is 8.2% less than a year earlier. As a result of this decline, the market volume rolled back to the level of 2018, when the indicator was measured at 2.52 million tons. This is evidenced by the data of the market research agency "GuideMarket," published in early October 2023.

As noted in the report, in 2018-2022 there were minor fluctuations in the Russian polyethylene market, and the market volume remained within 2.5-2.8 million tons. These data indicate that the primary form polyethylene market is showing stability and reliability. The return to 2018 levels suggests that the industry has successfully met the challenges and remains competitive, researchers report.

According to them, this is positive news for polyethylene producers and consumers, since market stability creates favorable conditions for business development and planning long-term strategies. In addition, such stability allows predictably managing risks and making informed decisions.

The potential of the polyethylene market in its primary form is estimated by analysts at GuideMarket at "plus" 30% to the volume of 2022, which will be associated with import substitution processes in the long term.

In mid-2023, an EU ban on the export of a wide range of chemical products and equipment began to operate against Russia within the framework of sanctions restrictions. In particular, the ban affected polypropylene and propylene copolymers. According to experts from the CEP GBP, before the imposition of sanctions, the Russian Federation occupied 42% of the European market for these products. According to Rosstat, polyethylene production in the Russian Federation in January-June 2023 decreased by 3%, to 1.89 million tons.^[4]

Reduction in polyethylene production by 0.1% to 3.35 million tons

The production of polyethylene in the Russian Federation began to decline after several years of growth. Such data for the results of 2022 were published by BusinesStat analysts at the end of July 2023.

According to experts, the production of polyethylene in the Russian Federation in 2022 turned out to be equal to 3.35 million tons, which is 0.1% less than a year earlier. The decline was due to a weakening of external demand - in 2022, polyethylene exports from Russia decreased by 17.6%, which was associated with the introduction of a sanctions ban on the import of ethylene polymers from Russia into EU countries. At the same time, domestic sales of polyethylene in 2022 by 3.8%, the report says.

The turnover of polyethylene imports to Russia in 2019 and 2021. increased by 15.2% and 46.6%, respectively. In 2020 and 2022, there was a decrease in the revenue of foreign suppliers, which was mainly due to a decrease in supplies in kind. In 2022, polyethylene was imported into Russia for $563.4 million, which turned out to be 11.5% lower than revenue in 2018.

In 2019, polyethylene imports to Russia increased by 40.3%. This growth was driven by increased domestic demand for polyethylene, which could not be met by domestic production. In 2020, the situation changed with the commissioning of Zapsibneftekhim - the domestic production of polyethylene increased, which made it possible to replace part of the imported supplies with Russian-made products, and the import of polyethylene into the country decreased by 25.2%. The decline in imports continued in 2021, but was not so significant (-3.1%).

In 2022, the violation of logistics routes led to a further reduction in polyethylene imports to Russia from European countries and the United States - imports decreased by 22.6% and amounted to 336.6 thousand tons, add BusinesStat researchers.^[5]

7.8% reduction in polypropylene production to 1.99 million tons

At the end of 2022, Russian enterprises produced 1.99 million tons of polypropylene, which is 7.8% less than the production volume a year earlier. This is evidenced by the data that BusinesStat analysts published in July 2023.

According to them, the decline in output was influenced by a decrease in sales of polypropylene domestically, as well as a decrease in export supplies. It is noted that the demand for polypropylene in the automotive industry has decreased the most, since the production of passenger cars in Russia decreased by 67% in 2022: from 1.37 to 0.45 million units.

At the same time, experts recorded an increase in demand for automotive components in the secondary market. An ageing car fleet and soaring car prices have seen buyers put off buying a new car and repair the old one more often. In addition to the growing demand for automotive components, the demand for polypropylene was supported by infrastructure projects and projects for the modernization of housing and communal services, carried out with the support of the state.

In 2022, polypropylene exports decreased by 12.4% under the influence of the introduced ban on the import of Russian polypropylene into EU countries. Supplies to Poland and Ukraine, as well as to Vietnam, decreased the most in 2022. An increase in supplies to Turkey, China and Uzbekistan helped to avoid a more significant drop in exports. BusinesStat estimates that restrictions on polypropylene exports to the EU will further reduce exports.

The volume of imported supplies in the supply structure on the market is relatively small - in 2018-2022. They averaged 6.6%. However, it is impossible to completely replace the import of polypropylene, since certain brands are imported into Russia that are not produced in the country, the researchers note.^[6]

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