Petrochemical industry in Russia

2025

Polypropylene production in Russia increased by 4% over the year and reached 2.1 million tons

The production of polypropylene in Russia amounted to 2.1 million tons in 2025. The increase to the level of 2024 reached 4%. The completion of repair work at the enterprises, as well as the launch of new capacities by Sibur, made it possible to increase production volumes. This is reported by BusinesStat in January 2026.

The level of annual polypropylene production ranges from 2 to 2.2 million tons and depends on its demand in the domestic and foreign markets. The utilization of existing production capacities also affects. The Russian polypropylene market remains highly concentrated. More than 95% of production comes from seven leading companies.

In 2021, polypropylene production increased by 10% to 2.2 million tons. Growth was ensured by the commissioning of new capacities and an increase in the load of existing lines. High demand for packaging and medical devices during the pandemic spurred output.

In 2022, production decreased by 7% to 2 million tons. The fall in demand within the country and restrictions on exports to the European Union negatively affected the indicators. The maintenance of imported equipment has become more complicated. There were problems with payment and logistics of supplies.

In 2023, polypropylene production increased by 9% to 2.2 million tons. The increase in output at Sibur enterprises provided the main increase. Recycling has recovered in the consuming industries. Logistics and supplies of critical special chemicals - catalysts and additives - have normalized.

In 2024, planned repairs at Russian enterprises contributed to a 7% decrease in polypropylene production to 2 million tons. Stopping lines for maintenance and upgrades temporarily reduced available capacity. This is a planned phenomenon for the chemical industry.

Key polypropylene manufacturers in Russia:

• PJSC Nizhnekamskneftekhim;
• Western Siberian Petrochemical Plant LLC;
• LLC Stavrolen"";
• LLC Ufaorgsinthesis"";
• LLC Omsk Polypropylene Plant (LLC Poliom).

Sibur Group and oil companies with their own sites - Lukoil and Bashneft - dominate the market. Vertical integration of refiners provides access to raw materials. Polypropylene is produced from propylene produced by cracking oil.^[1]

"Polyplast" for ₽20 billion opened a plant for the production of polymers for construction in the Tula region

In November 2025, the Polyplast group of companies launched the second stage of the complex for the production of high molecular weight thermostable polymers in the city of Novomoskovsk, Tula Region. The volume of investments in the project amounted to ₽20 billion. Read more here.

In Nizhny Tagil, a plant for the production of resins for the power, automotive and machine tool industry was built for ₽4 billion

In Nizhny Tagil, Sverdlovsk Region, a plant of the Uralkhimplast company was built for the production of foundry binders and novolac resins. Investments in the project amounted to more than ₽4 billion. This was announced on November 20, 2025 by the Governor of the Sverdlovsk Region Denis Pasler. Read more here.

Sibur built a plant for the production of catalysts for the production of synthetic rubbers for ₽6,3 billion

By mid-November 2025, Voronezhsintezkauchuk JSC, part of the Sibur group, is completing the construction of a new production of n-butyllithium catalyst with an investment of ₽6,3 billion. The new enterprise is designed to produce a key component in the production of synthetic rubbers and thermoplastics, commissioning is planned to be carried out in the first quarter of 2026. Read more here.

Sibur launched the first hexene plant in Russia for the production of complex polyethylene

Sibur Petrochemical Holding has put into operation the first Russia hexene production - an intermediate for the production of special grades of high and low density polyethylene at the enterprise in Nizhnekamsk. The new plant has released the first product batches, which will allow you to receive premium quality polymers with expanded consumer properties. General Director of Sibur Holding Mikhail Karisalov announced the launch of production of Raisa Tatarstan Rustam Minnikhanov on August 26, 2025. More. here

Russia's first polymer compound plant launched

BNG Compounds has launched the first full-cycle polymer compound plant in Russia at the production site in the Vyazemsky municipal district of the Smolensk region. The company is a unique vertically integrated complex for the country, specializing in the production of non-combustible materials with a closed production cycle from the extraction of raw materials to the manufacture of finished products. Investments primarily in the project amounted to ₽300 million, and production capacity will reach 400 tons of products per month. This became known in August 2025. Read more here.

Launch of a plant for the production of chemical polymers for cars and medicine in the Irkutsk region for ₽250 billion

In early May 2025, the Irkutsk Oil Company (INK) began launching the first polymer plant in Eastern Siberia, built in the Ust-Kut area. The design capacity of the new production complex will be 650 thousand tons of polymers per year. The volume of investments in the construction of this industrial facility is estimated at ₽250 billion. Read more here.

Osnova Holding launched a plant for the production of parts for petrochemical equipment for ₽1,9 billion

Osnova Holding Group launched a plant for the production of parts for petrochemical equipment, investing more than ₽1,9 billion in the project. The Omskelectrotech production site opened in March 2025 and specializes in the production of fasteners and connectors for the chemical, oil and gas and energy industries. Construction financing is partially provided with a preferential loan of ₽400 million from the Industrial Development Fund (FRP). Read more here.

2024

Russia reduced exports of the most popular polymers by 47% by the end of the year

In 2024, the volume of exports of vinyl chloride polymers amounted to 522 thousand tons. This figure is 46.6% lower than in 2023. The decrease is due to a set of factors: a reduction in production due to sanctions pressure, logistical difficulties, as well as high competition in Asian markets with cheaper Korean and Chinese products, analysts at Business Profile said. Read more here.

Production of lubricants in Russia for the year increased by 8.7% and reached 308.4 thousand tons

The production of lubricants in Russia in 2024 amounted to 308.4 thousand tons, an increase of 8.7% compared to 2023. This is evidenced by the data of the analytical company Alto Consulting Group, released in October 2025.

The growth reflects sustained demand from industry and the transportation sector, as well as capacity upgrades at leading businesses in the industry. The Central Federal District became the leader in production, providing 53.6% of the total.

The production of lubricants in Russia for the year increased by 8.7%

The dominance of the Central Federal District is due to the high concentration of industrial enterprises, proximity to key consumers and developed infrastructure. Regional focus optimizes logistics costs and accelerates delivery to customers.

The placement of more than half of the production facilities in one district creates the dependence of the industry on local economic and climatic conditions. Diversification of the geography of production would reduce the risks associated with concentration in a single center.

Expansion of production capacity has become one of the key factors for growth. The introduction of new lines and the modernization of equipment made it possible to increase production at existing enterprises. Investments in technical re-equipment increase the productivity and quality of lubricants.

Stable demand from industry provides a sustainable base for development. Mechanical engineering, power and transport actively use lubricants to service equipment and equipment. The growth of production in these sectors directly stimulates the need for lubricants.

Innovative manufacturing technologies improve product performance. The use of modern mixing and cleaning methods improves the quality of lubricants and the efficiency of production processes. Manufacturers invest in research and development to create products with improved properties.^[2]

Growth in production of porous plastic products by 6.1% to 560.1 thousand tons

The production of slabs, sheets, films and strips of other porous plastics in Russia in 2024 reached 560.1 thousand tons, which is 6.1% higher than in 2023. This was announced by the analytical company Alto Consulting Group in October 2025.

The growth indicates a gradual recovery in demand for high-tech polymer materials. The construction, packaging and industrial sectors have increased their consumption of products. The expansion of production facilities in key regions of the country supported the dynamics of output.

The production of plastic products in Russia over the year increased by 6.1% and reached 560.1 thousand tons

The leader of production was the Central Federal District. The region provided 37.9% of the total output of porous plastics. The indicator reflects the concentration of modern production complexes in the district. The availability of skilled labor and developed transport infrastructure ensure the leadership of the region.

The porous plastics segment is formed by a complex of internal and external factors. These factors directly affect production volumes and market prices. Domestic demand creates a stable base for the development of the industry.

The construction sector consumes significant volumes of porous plastics. Materials are used for thermal insulation and sound insulation of buildings. Industrial production uses products for various technical purposes. The packaging industry creates a stable consumer demand for polymer materials.

Technological innovations influence the development of the industry. The introduction of modern extrusion and foaming technologies makes it possible to improve the quality of products. New production methods reduce production costs. Upgrading equipment improves production efficiency.

The price situation in the world markets determines the cost of production. Fluctuations in the cost of polymers directly affect market prices. Manufacturers are forced to adapt pricing policies to changes in commodity markets.^[3]

11% increase in wax production to 13.6 tons

The production of artificial and finished waxes in Russia reached 13.6 tons in 2024. The figure is 11.2% higher than the previous year. The growth shows a steady expansion of the industry. Difficult economic conditions and fluctuations in world prices for raw materials did not interfere with positive dynamics. The Volga Federal District retains leadership and provides about 94.7% of the total output. This is evidenced by data from a study by Alto Consulting Group, published in October 2025.

The dominance of the Volga Federal District is due to the concentration of specialized enterprises. The developed infrastructure of the chemical industry in the region creates competitive advantages. Tatarstan and Samara region have concentrated the main capacities for the production of synthetic waxes. Enterprises in the region provide both domestic and export demand for products. The district's strategic importance to the industry is supported by years of leadership.

Wax production in Russia increased by 11% over the year thanks to the cosmetics market

Stable domestic demand from industry is driving growth in wax production. The cosmetics industry uses waxes for lipsticks, creams and decorative cosmetics. The candle industry uses synthetic waxes to make decorative and aromatic candles. Polishing agents for furniture and cars contain waxes as the main component. The packaging industry uses wax coatings to protect paper and cardboard containers.

The increase in export supplies opens up new sales markets for Russian manufacturers. CIS countries import waxes for their own chemical industries. Eastern Europe purchases products for the cosmetic and pharmaceutical industries. Modern production technologies make it possible to improve the quality of products. Cost reduction occurs through process automation and optimization of raw material consumption.^[4]

Production of polyethylene pipes for gas pipelines in Russia soared by 33% to 51.8 thousand tons over the year

The production of polyethylene pipes for gas pipelines in Russia in 2024 reached 51.8 thousand tons, which is 33.3% more than in 2023. The main leading region was the Ural Federal District, which accounted for about 25.2% of the total output. This is due to the developed oil and gas infrastructure of the region, the presence of large enterprises for the processing of polyethylene, as well as favorable transport and logistics accessibility to the main main gas pipelines. This was announced by the analytical company Alto Consulting Group in October 2025.

The result demonstrates the confident growth of the sector associated with the expansion of the construction of new gas distribution networks, the modernization of infrastructure and the active introduction of domestic technologies into production processes. The polyethylene pipe market for gas pipelines is showing steady growth. Starting from 2021, the growth rate annually ranged from 8% to 20%, and 2024 became a record in terms of production over the past five years.

The production of polyethylene pipes for gas pipelines in Russia increased by 33%

Analysts identify several key reasons for the growth in the production of polyethylene pipes for gas pipelines.

Reasons for the increase in production of polyethylene pipes for gas pipelines:

• Growth of domestic consumption within the framework of national gasification programs in the regions of Russia.
• Transition to safer, more durable materials.
• Active replacement of steel pipes with polyethylene pipes in existing systems.
• Support from the state within the framework of the technological import substitution program.

Polyethylene pipes actively displace metal analogs due to their durability, corrosion resistance and ease of installation. Modern materials, such as PE 80 and PE 100, allow gas pipelines to operate for up to 50 years even in difficult climatic conditions. According to industry enterprises, in 2024 the largest contribution to production was made by enterprises located in the Ural, Central and Volga federal districts. The total share of these three regions amounted to more than 70% of the all-Russian volume.^[5]

The production of polymer plates, sheets and films for construction and mechanical engineering in Russia for the year decreased by 0.2% to 1.68 million tons

The production of polymer plates, sheets, films and strips in Russia in 2024 amounted to 1,680,7 thousand tons, which is 0.2% lower than the level of 2023. The indicator demonstrates the relative stability of the industry against the background of fluctuations in global petrochemicals and changing demand from the construction, packaging and automotive sectors. The Central Federal District became the key region in terms of output, which accounted for about 34.3% of the total volume produced. This is due to the high concentration of processing enterprises, the availability of logistics infrastructure and proximity to the main sales markets. This is evidenced by the data of the analytical company Alto Consulting Group, released in October 2025.

The industry of polymer plates, sheets and films is one of the most technologically advanced in the Russian chemical industry. The main types of products include rigid and flexible plates, thermoformable sheets, film materials for packaging, as well as tapes and strips used in construction and engineering. The market continues to develop, confirming the high potential of polymer materials as a universal resource for many industries.

Annual production of polymer plates, sheets and films for construction and mechanical engineering in Russia fell to 1.68 million tons

Analysts highlight the main factors that led to a slight decline in production volumes in 2024.

The reasons for the reduction in the production of polymer plates, sheets and films:

• Correction of demand from the packaging industry.
• Reduced demand from the construction sector.

The correction of demand from the packaging industry influenced the production volumes of polymer films. Manufacturers of packaging materials have reduced purchases due to changes in consumer preferences and inventory optimization. The shift of part of the packaging industry to alternative materials has also reduced the consumption of traditional polymer films. Fluctuations in the food packaging segment affected the overall production indicators.^[6]

The production of tanks for the transportation of petrochemicals in Russia over the year increased by 12% and reached 10 billion units

Russian manufacturers of tank metal structures increased production in 2024 by 12% to 10 billion units. The indicator reached a historic high over the past five years due to the expansion of the production of small-capacity metal containers and an increase in demand from the chemical and petrochemical industries. This is evidenced by data from a study by analysts BusinesStat, published in September 2025.

The sustainable growth of the industry was provided mainly by small metal containers, which account for almost the entire volume of national production. The main consumers of products remain enterprises of the chemical and petrochemical sectors, where metal tanks are traditionally used for the storage and transportation of chemical reagents, lubricants and mineral fertilizers.

The leading positions in the Russian industry of tank metal structures are occupied by several large production companies:

• AUR Naro-Fominsk LLC;
• LLC "Ken-Pak Packaging Plant";
• Gazprom VNIIGAZ LLC;
• LLC Khimstalkon-Engineering"";
• CJSC Cheboksary Enterprise Sespel.

The dynamics of the production of tank steel structures showed stable growth throughout the five-year period. In 2020, the volume of output was 6.3 billion units, in 2021 the figure increased by 11% to 7.1 billion units. The most active growth occurred in 2022 - an increase of 17% to 8.2 billion units. In 2023, the pace slowed to 9%, ensuring production at the level of 9.0 billion units.

Import substitution retains the status of a key driver for the development of the Russian industry of metal structures. The share of foreign supplies in total sales in the domestic market has drastically decreased from 16% in 2021 to 4% in 2024. The withdrawal of international companies from the Russian market contributed to the activation of domestic manufacturers, including the aluminum packaging segment.^[7]

Bitumen production in Russia for the year reached 7.6 million tons

The volume of bitumen production in Russia amounted to 7.6 million tons in 2024, which confirms the stable position of the industry in the structure of the country's oil refining complex. The Russian bitumen materials market demonstrates stability and is at the maturity stage, characterized by the formed structure of participants and the transition from price competition to technological differentiation of products. Bitumen are critical materials for infrastructure and road construction, the production of roofing and insulation materials. This became known in August 2025.

According to Gidmarket, the bitumen market is undergoing an active stage of structural changes under the influence of technological, economic and geopolitical factors. The industry combines the introduction of new technologies and increasing the depth of oil refining with the need to adapt to foreign economic sanctions and logistics restrictions.

The volume of bitumen production in the Russian Federation for the year amounted to 7.6 million tons

The leading positions in the Russian bitumen market in 2024 were taken by:

• PJSC NK Rosneft through a subsidiary of LLC RN-Bitum.
• PJSC Gazprom Neft through LLC Gazpromneft - Bitumen Materials.
• PJSC LUKOIL through LLC LLK-International.

Independent producers' market share remains negligible as they experience a lack of investment and limited access to modern bituminous materials manufacturing technologies.

Bitumen production facilities are concentrated in several key regions of Russia. The main centers of production are Moscow, the Republic of Bashkortostan, Ryazan region, Samara region and Omsk region.

This geographical distribution is associated with the location of the largest oil refineries and a developed logistics infrastructure. Regional concentration of production creates supply imbalances in remote areas and increases transportation costs.^[8]

Growth in the production of rubber and plastic products by 18.3% to 2.46 trillion rubles

The production of rubber and plastic products Russia in 2024 reached 2.46 trillion, rubles which is 18.3% more than a year earlier. Such data were published in a report Rosstat that appeared on the agency's website in February 2025.

From the materials of Rosstat it follows that in 2024 the total revenue of Russian manufacturers of rubber and plastic products amounted to 2.62 trillion rubles, an increase of almost 20% compared to the previous year earlier. The index of production of rubber and plastic products in 2024 compared to 2023 amounted to 100.8%, in December 2024 - compared to the corresponding period of the previous year - 97.3%.

The production of rubber and plastic products in Russia over the year increased by 18.3% and exceeded 2.46 trillion rubles

According to Rosstat, in 2024, 35.4 million new pneumatic tires and tires for passenger cars were produced in Russia, which is 16.6% more compared to 2023. The production of tires and tires for buses, trolleybuses and trucks reached 5,918 thousand units, a decrease of 8.3% compared to the previous year. The production of tires for agricultural machines and other pneumatic tires amounted to 977 thousand units, which is 9.9% lower than in 2023.

The production of plastic pipes, pipes, hoses and their fittings amounted to 1,082 thousand tons, a decrease of 3.3% compared to 2023. The output of polymer plates, sheets, films and tapes (non-reinforced and non-combined with other materials) amounted to 1,681 thousand tons, which is 2.9% less than in 2023. The production of porous plastic plates, sheets, films and tapes amounted to 542 thousand tons, a decrease of 9.8% compared to last year, and the production of non-porous plastic plates, sheets, films and tapes amounted to 540 thousand tons, which is 3.2% less than in 2023.

Growth in sales of equipment for creating plastic products by 50% to ₽40 billion

The volume of the Russian market for extrusion equipment and components in 2024 reached ₽35-40 billion, demonstrating a CAGR of about 50% for the period 2021-2023. Such data from Smart Consult analysts were released in January 2025.

According to experts, the Russian market is characterized by high import dependence, while about 40% of foreign supplies in monetary terms are accounted for by manufacturers from unfriendly countries, despite sanctions and logistical difficulties.

Sales of equipment for creating plastic products in Russia for the year increased to ₽40 billion

Konstantin Seleznev, Commercial Director of Polymech Group LLC, noted that more than 50% of the equipment consumed is of Chinese origin, and his company's market share is 25%.

In 2024, the company "Munro Mechanics" from Togliatti launched the first production of twin-screw extruders and lines based on them in Russia. The test run of the MANRO DSE27 Pro line with a capacity of 100 kg/h was successfully carried out in September.

The largest foreign producers on the Russian market are WINDMOELLER&HOELSCHER KG from Germany, MACCHI S.P.A. from Italy, as well as Chinese companies JWELL MACHINERY and BEIER MACHINERY.

Commercial Director of Gran Garo LLC Evgeny Galikhaidarov confirmed that the share of Chinese extrusion equipment in the Russian market reaches 50-70%. Representatives of Granplast LLC also estimate the total share of foreign producers at 70%.

Since 2023, there has been a tendency towards import substitution of components. In particular, the products of the Kursk Electric Apparatus Plant began to replace Schneider Electric components in the production of extrusion lines.

The main deterrent to import substitution remains a limited range of products from Russian manufacturers, which specialize mainly in single-screw extruders for processing plastic waste.

The global extrusion equipment and components market is estimated at $8-10 billion, with the main concentration of production in North America, Europe, China and Japan. Demand for equipment is expected to grow from manufacturers of profile products, pipes, films and compounds.^[9]

Nizhnekamskneftekhim built an ethylene production complex for ₽200 billion

By mid-December 2024, Nizhnekamskneftekhim is completing the construction of the EP-600 ethylene complex. The volume of investments in this project exceeds 200 billion rubles. Read more here

Irkutsk oil company for ₽250 billion built a plant of polymers for cars

The Irkutsk Oil Company (INC) in December 2024 announced the completion of the construction of the first plant in Eastern Siberia for the production of polymers from its own raw materials. The volume of investments in the project amounted to ₽250 billion, the launch of the enterprise is scheduled for the first half of 2025. Read more here.

A new plant for the production of polymer pipes for water supply was opened in Primorye

The production enterprise Artyomovsky Pipe Plant in November 2024 began production of polymer pipes for water supply and drainage systems in the city of Artem, Primorsky Territory. The design capacity of the new plant is 3 thousand tons of products per year. Read more here.

Construction of a polymer production plant in Adygea for 600 million rubles

In the capital of Adygea, the construction of a plant for the production of polymer products of the Progress Agro group of companies has been completed. This project worth more than ₽600 million was announced on November 27, 2024. The launch of production will significantly reduce the region's dependence on imported polymer products and provide local manufacturers with high-quality packaging materials of domestic production. Read more here

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).

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.^[10]

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.

Russia in 2023 reduced exports of polyethylene by 35%

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.^[11]

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.

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.^[12]

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.^[13]

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.^[14]

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.^[15]

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