Czech crude imports Jan-Dec 2023

Russia supplied 4.387 million tons to the Czech Republic in the full year of 2023 at an average price of €543.1 per ton.  Azerbaijan was the second largest supplier, providing 1.965 million tons at an average price of $655.0 per ton.  Although the Czech Republic is striving to move away completely from Russian crude the second half of 2024 may be particularly difficult when the capacity of the TAL pipeline will be temporarily limited due to modifications.

Polish oil imports Jan-Dec 2023

From the total of 19.291 million tons of crude imported into Poland in 2023, supplies from Saudi Arabia totalled 8.871 million tons at €559.4 per ton and from Norway 6.032 million tons at €545.2 per ton.  

Orlen has achieved consistently higher refining margins than MOL despite than the MOL Group despite receiving some Russian discount.  MOL has already started transporting crude oil from its oil field in Azerbaijan to Slovnaft in Bratislava via the Adria oil pipeline, but still require Russian supplies.

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Orlen has gradually become more independent of Russian sources over the past decade.  Supplies from Russia ended in late February 2023. 

Polish petrochemical production Jan-Dec 2023

Ethylene production in Poland dropped from 459,200 tons in January to December 2022 to 310,600 tons in 2023, whilst propylene fell from 416,700 tons to 285,200 tons.  Butadiene production at Plock dropped to 49,400 tons from 59,500 tons. 

Due to these declines in petrochemical production and other sectors chemical production in Poland fell overall by 21% in 2023 against 2022.  In the plastics sector polyethylene production dropped to 271,200 tons in January to December 2023 versus 318,200 tons in 2023.  Polypropylene production at Plock dropped from 321,800 tons to 265,100 tons.  PVC production fell from 276,100 tons to 155,800 tons with the plant at Wloclawek idle in the last three months of 2023.

Orlen Group fourth quarter and Jan-Dec 2023

Revenues for the Orlen Group amounted to zl 372.640 billion (€86.179 billion) in 2023 versus zl 282.434 billion (€65.425 billion) in 2022.  The Group’s fourth-quarter results were impacted by the performance of the gas segment, which helped offset some of the declines recorded in refining and petrochemicals.

Petrochemical margins have been consistent with historical data in the past year, with the exception of butadiene in the second half of 2023, but the main problem has been the drop in volume sales.  Butadiene margins amounted to €173 per ton in the fourth quarter last year, rising from €115 in the third quarter, but dropping sharply from the peak of €614 in the third quarter in 2022.  In the aromatics sector benzene and paraxylene margins were somewhat stable although toluene margins showed more volatility dropping from €530 per ton in the third quarter to €348 in the fourth.

Despite relative stability in margins Orlen’s sales of petrochemicals dropped to 977,000 tons in the fourth quarter in 2023 against 1.133 million tons in the same quarter in 2022.  Total sales declined to 4.379 million tons in 2023 against 5.013 million tons in 2022. 

Last year was particularly difficult for European petrochemical producers, with costs for many companies exceeding revenues. 

Orlen’s sales revenues from petrochemicals totalled €6.985 billion in 2022 against costs of €6.461 billion, thus remaining profitable, but dropped to €4.255 billion in 2023 against production costs from energy, raw materials, transport, etc to €4.838 billion.

Orlen's refining business was affected last year by ending purchases of Russian raw materials.  Currently, crude oil is supplied from the North Sea, West Africa, the Mediterranean basin, as well as the Persian and Mexican Gulfs. An important partner in the supply of crude is Saudi Aramco, for which Orlen concluded a strategic contract for the supply of crude oil in 2022. 

Orlen’s refineries in Poland, the Czech Republic and Lithuania operated at 88% in the fourth quarter in 2023.  Overall, for 2023 refining volumes in the three countries belonging to the Orlen Group totalled 38.529 million tons against 37.020 million tons in 2022.    

Orlen Group utilisation rates

The olefins complex at Plock recorded a utilisation rate of only 37% in the fourth quarter against 70% in the second quarter and 78% in the first quarter.  Lower utilisation was seen to a lesser extent in the third quarter due to deficit in feedstock (CDU VI and hydrocracking shutdowns at the refinery).  Basell Orlen Polyolefins at Plock recorded lower utilisation rates in the fourth quarter, due in part to the availability of monomer feedstocks. 

Low demand also meant that Metathesis propylene plant at Plock was kept idle in the third and fourth quarters after only operating on a limited basis in the second quarter.  This impacted on propylene production for the Orlen Group which fell from 472,000 tons in 2022 to 362,000 tons in 2023. 

Other Orlen Group plants in Poland reported lower utilisation rates in 2023 due predominantly to demand side factors, including the PVC plant and PTA plant at Wloclawek.  Outside of Poland, Orlen Unipetrol achieved 81% utilisation at the Litvinov olefins complex in the fourth quarter after recovering from 49% in the second quarter.  In Lithuania Orlen Lietuva’s PPF splitter achieved an 84% utilisation rate in the third quarter. 

MOL’s petrochemical division Jan-Dec 2023

Lower petrochemical margins contributed to MOL’s the 41% drop in full year downstream EBITDA, which amounted to $1.328 billion.  More normal refinery margins were seen in 2023 against 2022 coupled with excessive extraordinary taxes that could only partly be offset by higher production and sales volumes.  The fourth quarter recorded an EBITDA of $456 million which was down by 3% against the second quarter. 

Despite a slight increase compared to the previous quarter, petrochemical margins remained weak in the fourth quarter.  As a result, the petrochemicals EBITDA continued to be in the red, contributing negatively to EBITDA in the whole of 2023.

Despite the weak demand MOL’s ethylene production in Hungary and Slovakia amounted to 648,000 tons in 2023 against 639,000 tons in 2022.  Propylene production rose from 330,000 tons to 346,000 tons, whilst butadiene decreased from 70,000 tons to 63,000 tons.   External olefin sales for MOL comprise ethylene shipments to BorsodChem for PVC production and internal group sales involve propylene to Slovnaft for polypropylene production.  In total olefin sales amounted to 157,000 tons against 156,000 tons in 2022. 

MOL’s petrochemical sales fell in the third quarter and fourth quarters both for olefins and butadiene, with petrochemical margins dropping progressively since the second quarter in 2022. 

MOL Group's most significant commitments in Hungary relate to a polyol project of MOL Petrochemicals (€105.8 million), which aims to become a major producer of polyether polyols.  Another €106.9 million is being invested in the construction of the metathesis project, which is a greenfield investment providing additional propylene for the polyol complex.  For the expansion of the maleic anhydride plant at the Danube refinery, located at Szazhalombatta, €30.7 million has been allocated.  Other projects being undertaken by MOL in Hungary include a revamp of the PP3 unit and modernisation of the ethylene.  In Croatia the Rijeka refinery, belonging to MOL subsidiary INA is undergoing an upgrade project.

HIP Petrohemija-production 2023 and investment targets

HIP Petrohemija was taken over fully by Naftna Industrija Srbije (NIS) from the second half of 2023, providing additional income for NIS of €130.1 million in the period July to December.  For the purposes of fair value estimation, HIP Petrohemija is viewed as a single cash-generating unit which includes facilities for cracker ethylene, HDPE, LDPE and synthetic rubber. 

The first planned maintenance shutdown undertaken at the HIP Petrohemija plant took place between 15 September and 31 October 2023, which meant that production and sales of petrochemicals were lower in the second half of the year.   The investment and overhaul activities contributed to increasing safety, improving energy efficiency, and the safe and reliable operation of the plant in the coming period. 

The strategy of further development of HIP Petrohemija will be based on the modernisation of basic production capacities and the construction of new facilities, then on increasing energy efficiency and business efficiency, as well as on the implementation of projects in the field of environmental protection.  Key investment activities have been carried out in the ethylene and PENG factories, and the aim is to increase the reliability of the plant, as well as increase operational and energy efficiency.

Czech olefin monomer trade, Jan-Dec 2023

Czech imports of ethylene amounted to 28,303 tons in January to December 2023, up from 23,198 tons in January to December 2022.  Ethylene exports from the Czech Republic amounted to 14,323 tons in January to December 2023 versus 12,560 tons in 2022.

Propylene imports into the Czech Republic rose from 38,321 tons in January to December 2022 to 39,408 tons in 2023, with main suppliers including Germany, Romania and Poland.  Average prices for propylene imports dropped in 2023 to €943.7 per ton from €1358.6 per ton in 2022. 

Exports of propylene at the same increased to 21,244 tons, up from only 3,070 tons in 2022.  The main destination for Czech propylene exports was Poland, taking 15,094 tons in January to December this year.  Czech imports of butadiene amounted to 65,772 tons in January to December 2023, all of which was supplied by Germany and Hungary.  Prices dropped dropping from €1178 per ton to €831.9 per ton.  Nearly all the butadiene went to Kralupy for conversion into synthetic rubber.   

Czech exports of ethylbenzene amounted to 96,210 tons against 79,271 tons in January to December 2022.  All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group. 

Propylene imports into the Czech Republic rose from 29,512 tons in January to December 2022 to 33,210 tons in 2023, with main suppliers including Germany, Romania and Poland.  Average prices for propylene imports dropped in 2023 to €943.7 per ton against €1436.5 per ton.  Exports of propylene at the same increased to 21,244 tons in 2023, up from only 3,070 tons in 2022.  The main destination for Czech propylene exports was Poland, taking 15,094 tons in 2023. 

Czech imports of butadiene amounted to 65,772 tons in January to December 2023, all of which was supplied by Germany and Hungary.  Prices dropped from €1178 per ton to €866 per ton.  Nearly all the butadiene went to Kralupy for conversion into synthetic rubber.  

Polish propylene & butadiene imports, Jan-Dec 2023

Contract prices of propylene and butadiene fell on average around a third against 2022.  The decline in prices has been driven in part by lower average prices of crude oil as well as the demand and supply dynamics.  The contract price of propylene in Europe increased towards the end of the third quarter, while production in the downstream sectors improved.  Any improvement in the latter part of 2023 was not been enough to eradicate the oversupply, meaning that prices have again come under pressure. 

Polypropylene demand has proved relatively stable but other derivative areas such as oxo alcohols and propylene oxide for the polyol industry continue to experience lower consumption than normal.  European crackers and refineries operated at their minimum technical loads in the early part of the third quarter, which helped to minimise the oversupply of propylene. 

Poland imported 124,373 tons of propylene in January to December 2023 against 122,540 tons in January to December 2022.  Market sources of propylene changed sharply since the Russian invasion of Ukraine in February 2022, firstly ending Russian shipments due to self-sanctioning and secondly from Ukraine where the sole petrochemical complex at Kalush had to stop production.     To replace imports from traditional suppliers Russia and Ukraine, imports this year apart from Germany have been sourced from Bulgaria, the Czech Republic, the Netherlands and Serbia.   Average prices dropped from €1251.5 per ton in January to December 2022 to €884.4 in 2022.

Butadiene import prices for Poland dropped from €1208.8 per ton in January to December 2022 to €959.3 per ton in January to December 2023 with volumes rising slightly from 89,506 tons to 89,887 tons.  Imports from Hungary dropped from 32,898 tons in 2022 to 23,077 tons. 

Hungarian butadiene exports amounted to 40,024 tons in the first eleven months in 2023 against 46,514 tons in the same period in 2022.  Shipments into Poland totalled 22,059 tons in January to November 2023 against 35,355 tons in the same period in 2022.  Exports to Germany dropped from 6,049 tons to 3,014 tons and to the Czech Republic rose from 5,110 tons to 14,951 tons.  Average prices for Hungarian butadiene exports fell to €822.3 per ton versus €1023.5 in 2022.

Central European styrene trade Jan-Dec 2023

Synthos was largely responsible for the imports of 72,532 tons of styrene into Poland in 2023 dropping from 95,444 tons in 2022.  The Netherlands was the leading supplier, shipping 32,356 tons to Poland which dropped from 51,779 tons in 2022.  Styrene import costs into Poland dropped from €1561.2 per ton in 2022 to €1156.1 in 2023. 

Italy remains the dominant source of styrene imports into Hungary, supplied by Versalis to its polystyrene plant at Szazhalombatta.  Imports of styrene into Hungary totalled 63,033 tons in January to November 2023, down from 78,490 tons in the same period in 2022.  Prices for styrene imports into Hungary dropped from €1672.9 per ton in January to November 2022 to €1394.5 per ton in 2023.

Styrene imports into the Czech Republic increased from 27,551 tons to 29,335 tons in 2023.  The main consumer is Synthos at Kralupy for processing into synthetic rubber.  The Netherlands was the main supplier, shipping 16,197 tons versus 18,943 tons whilst shipments from Germany amounted to 6,332 tons in January to December 2023 against almost only 187 tons in 2022. 

Styrene exports from the Czech Republic increased from 10,645 tons in 2022 to 14,436 tons in January to December 2023.  Exports were allowed to increase last year due to lower SBR production and thus less styrene consumption at Kralupy.  Czech exports of ethylbenzene amounted to 96,210 tons against 79,271 tons in January to December 2022. 

Central European polyolefin margins Q4 2023

Despite lower sales volumes in Europe last year polyethylene margins still averaged €365 per ton in the fourth quarter against €297 per ton in the first quarter in 2022.   Most producers reported lower polyolefin sales in 2023 due to recessionary trends affecting most of Europe.  Demand for LDPE and HDPE in Central Europe tended to stabilise in the third and fourth quarters but at the same time only showing only slight signs of growth in certain applications.  Prices have been on a falling trajectory this year, and with lower feedstock costs and margins have started to level out. 

Central European polyolefins production Jan-Dec 2023

Production of polyethylene in Poland fell from 318,200 tons in 2022 to 271,200 tons in 2023.  Polypropylene production fell from 321,800 tons in 2022 to 265,100 tons in January to December 2023.  Currently polypropylene production in Poland takes place at Plock, but in the near future production will start at the new Polimery Police plant.  This plant was expected to start in August or September, but problems with the equipment during the start-up phase has been the cause of the delay.  

The MOL Group reduced polyethylene production less than Orlen, falling slightly from 502,000 tons in 2022 to 495,000 tons in 2023 at its two plants in Hungary and Slvakia.  HDPE production at Tiszaujvaros dropped from 286,000 tons to 285,000 tons.  Polyolefin sales from the MOL Group amounted to a total of 978,000 tons in 2023 994,000 tons in 2022.

Czech polyethylene production and trade Jan-Dec 2023

Production of polyethylene at Litvinov amounted to 354,000 tons in the period January to December 2023 against 370,000 tons in 2022. 

Consumption of polyethylene in the Czech Republic has mirrored other markets in Europe in the past two years, with quarterly volumes falling sharply in 2023.  Overall, for 2023 Czech polyethylene consumption fell to 235,604 tons against 269,901 tons in 2022. 

Czech prices for both exports and imports of polyolefins were lower in 2023 against 2022.  Polyethylene exports amounted to 410,125 tons in 2023 against 412,178 tons in 2022. 

HDPE export shipments comprised 354,103 tons in 2023 against 357,022 tons in 2022.  Germany was the largest destination for Czech HDPE supplied from Litvinov in 2023, amounting to 141,703 tons in January to December for €167.993 million.  Other important markets for Czech polyethylene exports include Poland, Italy and Belgium. 

For imports of all forms of polyethylene, Czech inward shipments amounted to 291,729 tons in January to December 2023 against 309,629 tons in 2022, with prices dropping from €1929.2 per ton to €1579.5 per ton.  Germany was the largest source of polyethylene imports, amounting to 62,780 tons for €94.108 million, followed by Belgium with 35,954 tons for €55.357 million.

Polish polyethylene trade Jan-Dec 2023

Polish trade in polyethylene declined in 2023, for both imports and exports and both in volume and value.  Economic conditions affected both demand and pricing.   Overall Poland carries a large deficit in polyethylene supply, which is major factor behind Orlen’s Olefiny 111 project at Plock now under construction.

Polish imports of polyethylene totalled 1.250 million tons in 2023 against 1.314 million tons in January to December 2022, with average prices falling from €1786.5 per ton to €1370.8 per ton.  Imports of polyolefins and all types of plastics from Russia into Poland saw a progressive decline in 2022, with other suppliers from Europe taking more market share. 

Total costs of polyethylene imports into Poland amounted to €1.703 billion against €2.348 billion in 2022.  HDPE is the largest category of imported polyethylene into Poland, amounting to 423,415 tons in January to December versus 455,577 tons in January to December 2022.  Germany was the largest supplier of HDPE to the Polish market in 2023.   

LLDPE imports dropped from 238,186 tons in January to December 2022 to 204,920 tons in the corresponding period in 2023.  Most of the LLDPE imports were sourced mostly from West Europe, including France, the Netherlands and Germany.  LDPE imports remained relatively stable, amounting to 345,195 tons versus 351,894 tons in 2022.

Polish polyethylene exports amounted to 282,519 tons in 2023 against 343,998 tons in 2022.  Average prices for polyethylene exports from Poland declined to €1343.6 per ton against an average of €1623.7 per ton in the period January to December 2022. 

Revenues from exports decreased from €558.548 million to €379.589 million in January to December 2023.  Exports of HDPE from Poland amounted to 188,700 tons versus 227,634 tons in January to December 2022.  LDPE exports dropped from 63,736 tons to 56,102 tons.

Hungarian polyethylene trade Jan-Nov 2023

Hungarian polyethylene exports were slightly lower in the first eleven months in 2023, amounting to 301,971 tons against 315,513 tons in the same period in 2022. Revenues fell from €496.180 million to €375.808 million in 2023, meaning that average prices dropped from €1572.6 per ton in 2022 to €1244.5 per ton. 

HDPE shipments from Hungary amounted to 206,885 tons in January to November 2023 versus 211,228 tons in the same eleven months in 2023, whilst exports of LDPE dropped from 80,409 tons to 77,782 tons. 

Hungary remains a net exporter of LDPE and HDPE and still a net importer of LLDPE and ethylene copolymers.  In the first eleven months in 2023 imports of all grades of polyethylene into Hungary amounted to 203,464 tons against 187,060 tons in the same period in 2022.  Import costs for polyethylene fell to €300.742 million against €347.727 million.

Hungarian import prices for polyethylene decreased on average from €1858.9 in January to November 2022 to €1478.1 in the first eleven months in 2023 with gradual price declines since the start of the year. 

Polish PP Trade Jan-Dec 2023

Polish polypropylene imports, including homo grade and copolymers, fell in January to December 2023 to a total of 916,108 tons versus 923,766 tons in January to December 2022.  Average prices per ton for all types of polypropylene decreased from €1787.7 to €1458.1 per ton.  Homo grade polypropylene imports specifically dropped from 609,740 tons in 2022 to 594,789 tons in 2023, whilst copolymer imports increased from 289,262 tons to 292,816 tons. 

Germany supplied 61,531 tons of propylene copolymers to Poland in 2023 for €98.881 million followed by the Netherlands with 34,109 tons for €52.461 million and Belgium supplying 30,852 tons for €51.305 million. 

Regarding export activity from Poland, shipments amounted to 213,135 tons against 262,768 tons in January to December 2022.  Homo polymer grades comprised the main category of Polish polypropylene exports, where Germany was the largest destination taking 35,183 tons in for €45.982 million.  Germany was followed by the Czech Republic taking 29,268 tons from Poland for €34.250 million. 

Polimery Police preparing for start-up tests

The Polish market for polypropylene is dominated by import activity, with inward shipments amounting to 916,000 tons in 2023 against exports of 213,100 tons. 

The deficit in the trade balance was probably the main factor influencing Grupa Azoty to invest in the Polimery Police project.  The project itself had progressed as scheduled until the past twelve months when the main contractor Hyundai informed Azoty of difficulties in completing construction. 

Notwithstanding financial difficulties for Grupa Azoty, the current status of the project requires an integrity test of the plant to be carried out in the first quarter and the start of commercial operation of the plant in the first half of 2024. The integrity test should show if the plant has been completed to the technical specification and to identify any bugs before production is started.  Propylene and polypropylene have thus far passed positive tests and are available for sale, including over 30 types of Gryfilen polypropylene.  The product range includes homopolymers, random copolymers and impact copolymers. The first types of polypropylenes have already been produced of which the first two are on regular sale.  These include products for the production of strings and strapping tapes, and for the production of rigid packaging in thermoforming technology.    Another product is being designed for the production of BOPP film.

Grupa Azoty Polyolefins has set out plans to operate Polimery Police at up to 70% of its nominal capacity in the first half this year, with the aim of increasing production to full capacity by the end of the third quarter. 

Czech polypropylene production and trade Jan-Dec 2023

Production of polypropylene at Litvinov amounted to 207,000 tons in the period January to December 2023 against 278,000 tons in 2022.  Consumption of polypropylene in the Czech Republic fell to 390,502 tons against 470,303 tons in 2022.  Polypropylene is much more widely used in the Czech plastics industry than polyethylene.

Exports of all forms of polypropylene from the Czech Republic amounted to 299,002 tons in January to December versus 307,896 tons in January to December 2022, with average prices dropping from €1632.9 per ton to €1368.3.  Homo-grade PP provides the main category of Czech polypropylene exports, amounting to 224,071 tons in 2023 last year versus 253,671 tons in 2022.   

For imports of all forms of polypropylene, Czech inward shipments increased to 525,443 tons in January to December 2023 from 497,479 tons in 2022, with average prices dropping from €1909.1 per ton to €1584.8 per ton.  Imports of propylene copolymers increased from 191,580 tons to 214,690 tons whilst homo grade polypropylene imports increased from 288,258 tons to 295,829 tons.    

Hungarian polypropylene trade Jan-Nov 2023

MOL shipped 115,905 tons of homo grade polypropylene (valued at €154.360 million) in January to November 2023 which was up from 105,149 tons in the same period in 2022 (€189.736 million in value), whilst copolymer exports rose slightly from 82,075 tons (€159.195 million in value) tons to 82,782 tons (€116.803 million).    

Hungarian export revenues dropped for all grades of polypropylene from €365.189 million to €237.439 million, with average prices dropping from €1805.1 per ton to €1355.0.  Polypropylene imports into Hungary amounted to 184,251 tons in the first eleven months in 2023 versus 197,735 tons in the same period in 2022, with costs in January-November 2023 amounting to €316.205.520 million from €351.877 million in 2022. 

Overall average prices fell from €1779.5 per ton in 2022 to €1717.0 per ton in 2023, whilst copolymer prices dropped from €1845.9 to €1624.1 per ton.  By category homo grade imports into Hungary comprised 109,463 tons in January to November 2023 against 117,255 tons whilst copolymers fell to 46,945 tons against 53,488 tons.

Czech synthetic rubber trade Jan-Dec 2023

Czech exports of synthetic rubber amounted to 149,520 tons in January to December 2023 versus 182,509 tons in 2022.  Imports declined from 155,873 tons to 98,084 tons in January to December 2023.  Natural rubber imports into the Czech Republic dropped slightly from 91,849 tons to 88,822 tons.    

Exports of emulsion styrene butadiene rubber (ESBR) from the Czech Republic dropped in 2023 to 24,545 tons against a total of 65,352 tons in 2022.  Until it was stopped last year the Kralupy plant had a capacity of 110,000 tpa of ESBR and its permanent closure will reduce Synthos’ total ESBR capacity to 320,000 tpa.  Despite the closure of the Kralupy plant, Synthos remains the largest producer of ESBR in Europe, with 190,000 tpa of ESBR capacity at its site at Oswiecim and 130,000 tpa at Schkopau. 

Czech butadiene rubber trade Jan-Dec 2023

The Czech Republic exported a total of 107,525 tons of butadiene rubber in 2023 against 104,226 tons in 2022.  Average prices fell from €2193.0 per ton to €1502.0 per ton.  Czech exports of butadiene rubber to India amounted to 14,864 tons was shipped in January to December 2023 against 20,418 tons in 2022.  Other important markets included Poland where exports amounted to 13,372 tons in 2023 against 13,576 tons in 2022, and South Korea rising from 7,027 tons to 11,890 tons.   Exports to Slovakia rose from 8,470 tons to 11,610 tons.

Besides exports the Czech Republic also imported 24,271 tons of butadiene rubber in 2023 versus 28,871 tons in 2022. 

Hungarian synthetic rubber imports Jan-Nov 2023

Hungarian imports of synthetic rubber amounted to 115,624 tons in the first eleven months versus 114,807 tons in January to November 2022, whilst values dropped from €331.505 million to €257.075 million.  Average prices rose slightly from €2223.4 per ton to €2887.5 in 2023.

Butadiene rubber imports dropped from 42,603 tons to 39,995 tons, with costs dropping from €94.409 million to €70.283 million.  Imports of butadiene rubber from Russia dropped from 13,142 tons to 2,318 tons in January to November 2023 whilst imports from Indonesia increased from 4,073 tons to 13,226 tons.  Imports of halogenated butyl rubber dropped from 14,389 tons in the first eleven months in 2022 to 7,174 tons and SBR imports rose from 37,341 tons to 47,652 tons.  

Polish rubber trade Jan-Dec 2023

Rubber import prices into Poland for both synthetic and natural recorded gradual declines during 2023 as a combination of economic factors took effect.  For all types of synthetic rubber average prices dropped from €2595.8 in 2022 to €2148.7 in 2023. 

Poland imported 265,947 tons of synthetic rubber in January to December 2023 against 288,439 tons in January to December 2022.  By category butadiene rubber was the largest, accounting for 55,043 tons against 57,699 tons in 2022.   Imports of synthetic rubber from Russia amounted to 50,547 tons in 2023 against 92,653 tons in 2022 and 133,341 tons in 2021. 

The largest grade of synthetic rubber imported from Russia to Poland in 2023 was block copolymers, amounting for 15,002 tons.

Russia supplied 12,149 tons of butadiene rubber to the Polish market in 2023 for €19.118 million.  Although much reduced than in previous years Russia is legally able to export most grades of synthetic rubber up until June 2024.  Sanctions were first imposed on Russia in July 2022 but were amended in February 2023 under pressure from European tyre manufacturers. 

Synthos from the Kralupy plant has been able to increase its butadiene rubber exports to Poland this year, amounting to 8,639 tons in 2023 for €15.235 million.  Saudi Arabia has been a new supplier of butadiene rubber to Poland since last year, replacing some Russian imports.  In 2023 imports from Saudi Arabia amounted to 8,931 tons for €12.979 million. 

Imports of halogenated butyl rubber from Russia amounted to 5,350 tons from the total of 10,814 tons in the period January to December 2023.  The US and UK have started supplying Poland this year to replace some of the Russian imports.   

Synthetic rubber exports from Poland amounted to 272,948 tons in 2023 against 285,301 tons in January to December 2022.   Exports of butadiene rubber from Poland amounted to 45,985 tons in January to December versus 45,246 tons in 2022.   Major destinations for Polish butadiene exports were led by Belgium which took 9,014 tons in 2023 for €13.346 million.  Exports of butadiene to Brazil amounted 6.883 tons for €9.836 million and the Czech Republic 4,993 tons for €8.028 million.

Poland exported 5,348 tons of halogenated butyl rubber in 2023 against 7,362 tons in 2022.  Halogenated butyl rubber is not produced in Poland and was previously imported from Russia.  Hungary was the largest destination for Polish exports of HBR in the period January to December 2023, accounting for 3,258 tons for €8.255 million.

Polish synthetic rubber production and domestic market Jan-Dec 2023

Synthetic rubber production at Oswiecim for Synthos amounted to 207,600 tons in January to December 2023 from 258,700 tons in 2022.  Production of synthetic rubber has been affected by demand side factors which saw a reduction of consumption in the tyre sector from 416,200 tons in 2022 to 346,700 tons.  Rubber sales from Synthos dropped by about 10% in 2023.  On a quarterly basis there has been a decline in sales for each quarter from the start of 2022 through to the end of 2023.  By illustration, Synthos sold 256,000 tons of synthetic rubber in the first quarter in 2022 which declined to 130,000 tons in the fourth quarter last year.

Synthos is the largest European manufacturer of styrene butadiene rubber (ESBR and SSBR), also offers neodymium polybutadiene rubber (NdBR), high styrene rubber (HSR) and nitrile butadiene rubbers (NBR).

Polish benzene exports Jan-Dec 2023

Poland is largely a net importer of aromatic products but does export large volumes of benzene and PTA.  Polish exports of benzene totalled 119,319 tons in January to December 2023 against 119,908 tons in 2022.  Average prices for benzene dropped to €774.2 per ton from €1031.0 per ton last year.  Germany purchased 107,357 tons from Poland in 2023 and the Czech Republic 16,356 tons.  Benzene exports from Poland were slightly lower in the first part of 2023 due to problems for Petrochemia Blachownia in receiving coal based raw materials from Ukraine.  Petrochemia Blachownia is part of the Czech Agrofert group.

Polish-Czech aromatic imports Jan-Dec 2023

Phenol imports into Poland amounted to 59,569 tons in January to December 2023 which was down from 79,440 tons in 2022.  In January to December last year Germany was the dominant supplier of phenol to Poland, shipping 32,231 tons for €30.553 million.   Russia previously provided phenol shipments to Poland, but the last delivery was made in early 2022. 

The market balance for phenol consumption in 2023 showed some decline, dropping from 137,395 tons in 2022 to 124,180 tons.  Phenol production at Plock fell from 42,801 tons to 38,940 tons.  The project to expand phenol capacity to 70,000 tpa appears to have been placed on hold. 

Phthalic anhydride imports into Poland increased from 30,806 tons in January to December 2022 to 33,340 tons in the same period in 2023.  Imports from South Korea amounted to 16,741 tons in 2023 for €18.215 million, followed by Austria from the Schwechat plant with shipments of 4,433 tons for €6.704 million.  The Czech Republic supplied 3,433 tons for €4.943 million.  Phthalic anhydride is supplied by the Czech Republic from the Deza plant at Valasske Mezirici.

In other product areas, styrene imports amounted to 59,990 tons in the period January to December 2023 versus 92,211 tons in 2022 whilst ethylbenzene imports rose from 102,921 tons to 117,818 tons.  Nearly all of the ethylbenzene imports come from the Czech Republic.  All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group. 

Regarding Czech trade in aromatic monomers and derivatives, styrene exports increased from Kralupy in 2023, rising to 14,436 tons from 10,645 tons in 2022.  Czech benzene imports dropped to 25,656 tons in 2023 against 72,591 tons in 2022, whilst toluene imports dropped to 6,446 tons and styrene rose to 29,375 tons up from 14,093 tons.  Imports of bisphenol A dropped from 29,069 tons to 26,864 tons.  There are two producers of benzene in the Czech Republic including Unipetrol at Litvinov and Deza at Valasske Mezirici.  Deza is owned by Agrofert and intends to increase the production capacity of benzene to 160,000 tpa in addition to toluene to 25,000 tpa. 

Bisphenol A imports into Central Europe

Bisphenol A imports into the Czech Republic totalled 26,864 tons in 2023 against 29,069 tons in 2022.  Poland increased imports from 10,900 tons to 12,350 tons.  The largest user of bisphenol A in the Czech Republic is Spolchemie at Ust nad Labem, where epoxy resins are produced. 

The main source of imports is South Korea which supplied 13,824 tons to the Czech Republic in 2023 which was up from 11,072 tons in 2022.   Poland also increased shipments from South Korea last year rising from 6,909 tons to 11,445 tons from the total imports of 14,089 tons in 2023.  The largest European recipient of Korean BPA was Germany, rising to 52,157 tons against 15,514 tons in 2022.

Spolchemie’s capacity for epoxy resin production amounts to 100,000 tpa making it one of the largest producers in Europe.  Czech exports of epoxy resins amounted to 46,416 tons in 2023 against 53,843 tons in 2022.  Whilst volumes were similar, prices fell from €4,567.2 per ton to €3,164.8 per ton.  This price erosion took place after the decline in raw material prices combined with downward pressure from market conditions.  Germany remains the largest market for Czech epoxides, accounting for 20,845 tons in 2023 with the next largest being Italy which accounted for 4,100 tons.

Polish exports of epoxy resins amounted to 7,972 tons in 2023 at an average price of €2966.5 per ton against imports of 23,178 tons at an average price of €3045.0 per ton.  In Poland production takes place at Lerg (formerly Ciech Zywice) which is the sixth largest producer in Europe at 30,000 tpa.  Aside domestic production the most serious competitors in Poland include resin suppliers from Germany, the Czech Republic and Italy.

Hungarian aromatic trade Jan-Nov 2023

Hungarian benzene exports in the first eleven months in 2023 amounted to 64,024 tons for total costs of €53.146 million.  Exports are distributed largely to Germany, Belgium and the Czech Republic.  Exports dropped from 92,516 tons in January to November 2022 with average prices dropping from €1008.4 per ton to €830.1 per ton.  MOL produces benzene at the Százhalombatta refinery in Hungary, and the Bratislava refinery in Slovakia. Delivery is possible via road tank cars and rail tank cars.  MOL has a combined capacity of aromatics production at its two refineries of 400,000 tpa.

The production of toluene at Szazhalombatta is insufficient to cover Hungarian demand and thus imports are required.  Toluene imports into Hungary amounted to 40,113 tons in the first eleven months for €46.169 million in value.  Toluene imports last year were lower in correlation with lower TDI production.  Germany was the largest supplier of toluene providing 19,255 tons to the Hungarian market followed by Slovakia with 7,108 tons. 

Central European caprolactam market Jan-Dec 2023

The Czech Republic exported 22,192 tons of caprolactam in 2023 down from 36,369 tons in 2022.  Average prices dropped from €2600.1 per ton to €1519.6 in 2023.  All of the exports were shipped to European countries.  Italy was the largest destination for Spolana’s exports, reducing shipments from 27,225 tons in 2022 to 36,369 tons in 2023.

Poland reduced production of caprolactam to 91,000 tons in 2023 against 133,000 tons in January to December 2022.  Since the second half of 2022 caprolactam production by Grupa Azoty at its two plants at Tarnow and Pulawy has been affected higher energy costs, combined with continuous weak demand for polyamide.  Caprolactam imports into Poland amounted to 11,483 tons in 2023, nearly all of which was supplied from Germany.  Poland became a net importer of caprolactam after its expansion of polyamide capacity at Tarnow.

Consumption of caprolactam in Poland dropped to 102,483 tons in 2023 against 143,517 tons in 2022.  The fourth quarter in 2023 did show some minor improvement over the second and third quarters but as illustrated production and consumption are way down compared to the first quarter in 2022.

Polish PTA exports Jan-Dec 2023

PKN Orlen operates a modern PX/PTA complex with a capacity of around 690,000 tpa of PTA.  PKN Orlen is the only producer in Europe to have production units fully integrated with paraxylene production.

The European nominal PTA production capacities total 3.985 million tpa.  This includes Indorama with a nominal production capacity of 1.750 million tpa and assets located in Portugal, Spain and the Netherlands.  Ineos Aromatics is Europe’s second largest PTA manufacturer, with a production capacity of 1.400 million tpa, located in Belgium.

In 2023 the Orlen Group undertook extended downtime at the PTA unit at Wloclawek, partly due technical needs and partly due to weak demand.  Revenues from PTA sales for Orlen, both for export or domestic, amounted to €336.6 million which was considerably lower of the €573.8 million in 2022.  By volume, sales dropped from 573,000 tons in January to December 2022 to 413,000 tons in January to December 2023.  Production at Wloclawek totalled 410,000 tons in 2023 against 572,000 tons.

The significant drop in Orlen’s production meant that PTA exports from Poland amounted to only 238,786 tons in January to December 2023 against 392,913 tons in January to December 2022.  Average prices fell from €992.9 per ton to €753.1 per ton.  Lower production impacted on exports to the traditional main destination Germany where deliveries fell from 315,885 tons in January to December 2022 to 192,047 tons.  

Turkey was the second largest destination for PTA export shipments, taking 11,971 tons versus 5,984 tons in 2022.  PTA producers anticipate that supply will remain limited into 2024, the prices of the raw material will be under pressure due to rising oil prices and downstream processors’ efforts to contain price hikes.

Hungarian TDI-MDI exports Jan-Nov 2023

Hungarian TDI exports rose in the first eleven months last year to 221,746 tons against 215,694 tons in January to November 2022.  Average prices dropped from €2862.8 per ton to €2519.2 in 2023.  Although prices overall were higher in the first half last year the trend has been falling gradually. 

Volume sales of TDI tended to increase in the latter part of 2023 after a difficult first half of the year.   Exports of TDI to Belgium rose from 19,774 tons in the first eleven months in 2022 to 28,281 tons in January to November 2023, whilst volumes to Italy fell from 30,929 tons to 25,458 tons. 

 Elsewhere in West Europe exports to Portugal dropped from 10,917 tons to 10,158 tons, whilst shipments to Spain increased from 8,893 tons to 9,530 tons.  In Central Europe shipments to Poland fell from 28,620 tons to 25,627 tons and rose to Romania from 13,235 tons to 13,414 tons.

MDI exports from Hungary dropped in the first eleven months in 2022 from 176,380 tons to 152,892 tons in the same period in 2023. The most significant drop in sales was the US where no shipments were made in the first eleven months against 23,562 tons in January to November 2022.  MDI export prices underwent a different cycle to TDI, dropping from €2572.8 per ton in January to November 2022 to €1979.6 per ton this year.

Poland was the largest destination for Hungarian MDI exports, shipping 29,556 tons in the first eleven months in 2023 versus 30,438 tons in the same period in 2022.  Romania is the second largest market in Central and South East Europe, taking 13,519 tons in the first eleven months this year which was down from 19,260 tons. 

Central European isocyanate trade Jan-Dec 2023

MDI imports into the Czech Republic totalled 38,333 tons in January to December 2023 against 35,189 tons in 2022.  Average prices dropped from €2486.4 per ton to €2370.1 per ton.    The leading supplier was Hungary which shipped 10,233 tons against 8,265 tons.  TDI imports into the Czech Republic amounted to 7,173 tons in January to December 2023 versus 7,428 tons in January to December 2022.   

MDI imports into Poland totalled 147,230 tons in January to December 2023 against 138,124 tons in January to December 2023.  Average prices dropped from €2796.4 per ton to €2023.7 in January to December 2023.  Germany increased shipments to 41,880 tons against 35,888 tons in January to December 2022, whilst imports from Hungary amounted to 36,106 tons against 34,957 tons.

TDI imports into Poland amounted to 70,880 tons in January to December 2023 against 74,137 tons in January to December 2022.  Prices last year averaged €2524.5 per ton against

€2720.4 per ton in 2022.  The cost of toluene was one of the factors behind the rise in TDI prices in the first half of the year but then slowed down later in the year allowing TDI prices to move downwards.  Besides imports, Poland exported 4,454 tons of TDI in 2023, of which 716 tons was shipped to Russia.

Czech polyol imports Jan-Dec 2023

Czech polyol imports increased in 2023 to 46,229 tons against 41,896 tons in the same period in 2022, with average prices dropping from €2812.5 per ton last year to €2419.8 in 2023.  The leading supplier to the Czech market was Belgium which shipped 13,706 tons in the period January to December 2023 against 11,099 tons in 2022, followed by Germany which exported 8,719 tons which was up from 8,333 tons.  Hungary imported 28,049 tons of polyols in the first eleven months this year against 21,617 tons in the same period in 2022.  The largest source of imports came from Belgium in the first eleven months, amounting to 12,388 tons against 1,345 tons in the same period in 2022.

Polish polyol trade Jan-Dec 2023

Polish polyol imports amounted to 145,292 tons in 2023 against 137,595 tons in 2022.  The major sources of imports came from Belgium, Germany and the Netherlands.  Polyol import prices dropped from €2140.1 per ton to €2593.5 per ton.  The largest source of imports came from Germany 2023, amounting to 31,053 tons against 24,462 tons in 2022.

Exports of polyols from Poland in 2023 amounted to 55,717 tons against 59,177 tons in 2022.  Destinations for deliveries were focused mostly on Europe in 2023, led by Germany taking 5,791 tons followed by Italy taking 5,579 tons.  Due to lower prices this year export revenues dropped from €153.353 million to €123.215 million.

MOL polyol plant start-up

MOL claims that it wants to start the new polyol plant at Tiszaujvaros in the first half of 2024; similar references have been made previously but have not been carried through due to market concerns.  There are suggestions that MOL has been waiting for European markets to revive before starting production.   Start-up would clearly have a negative impact on pricing which remains under pressure from weak market activity. 

MOL's original goal was to complete the polyol plant worth $1.3 billion with a production capacity of 200,000 tpa by the second half of 2021, but due to Covid the plans had to be modified.  By March 2021, the project was 79% complete and thus it took to the end of 2023 to raise that level to 98%. 

Hungarian polyol imports amounted to 35,418 tons in the first eleven months last year against 30,806 tons in the same period in 2022.  Belgium was the largest supplier last year, shipping 12,833 tons, followed by China with 9,310 tons.  Other polyol suppliers to Hungary included the Netherlands, Poland and Romania.

Hungarian maleic anhydride exports Jan-Nov 2023

Hungary exported 18,027 tons of maleic anhydride in the first eleven months last year against 19,016 tons in the same period in 2022, with average prices dropping from €2071.0 per ton to €1164.0 per ton.  Export shipments to Italy and Austria amounted to 2,692 tons and 2,012 tons in the first eleven months this year.  Exports to Poland from Hungary dropped from 4,657 tons in January to November 2022 to 2,647 tons.  Expansion of the maleic anhydride plant at Szazhalombatta represents one of MOL’s current investment priorities.   

Hungarian acrylonitrile imports Jan-Nov 2023

Hungary imported 17,003 tons of acrylonitrile in the first eleven months in 2023 which was significantly lower that the 54,812 tons in the same period in 2022.  The Netherlands was the main source of imports in both years, shipping 10,266 tons in January to November 2023 versus 28,584 tons in the same period in 2022.  Acrylonitrile prices dropped on average from €2303.8 per ton in the first eleven months last year to €2077.5 per ton in 2023. 

Hungarian aniline imports Jan-Nov 2023

Aniline imports into Hungary dropped from 161,148 tons in the first eleven months in 2022 to 94,123 tons in the same period in 2023.  Inward shipments from BorsodChem-MCHZ in the Czech Republic amounted to 56,479 tons against 138,784 tons in the same period in 2022.  Belgium supplied 24,545 tons in the first eleven months last year against 14,898 tons in the same period in 2022.  Cost prices of aniline imports dropped from €1842.0 per ton to €1421.7 in 2023.

Polish organic chemical trade Jan-Dec 2023

Exports of organic chemicals from Poland fell from 2.160 million tons in January to December 2022 to 1.457 million tons in 2023, whilst imports dropped from 5.009 million tons to 3.912 million tons.    High energy prices played a key role in driving up values last year which are still impacting on production and trade. 

Methanol imports into Poland totalled 637,531 tons in January to December last year against 932,863 tons in 2022.  For other organic chemical imports Poland imported 37,537 tons of acetic acid in January to December against 45,451 tons in January to December 2022.  The US was the leading supplier, shipping 17,414 tons followed by the UK with 9,820 tons.  Imports from Germany dropped from 6,785 tons in 2022 to 2,062 tons whilst shipments from China dropped from 6,617 tons to 2,818 tons.  Average prices for acetic acid imports into Poland declined from 2022 when they were €1164.8 per ton to €768 per ton in 2023.

Ethyl acetate imports into Poland amounted to 20,765 tons in January to December 2023 against 15,839 tons in January to December 2022.  Belgium provided the largest share of imports.  Average prices for ethyl acetate dropped from €1556.6 per ton in 2022 to €1022.7 per ton.  VAM imports amounted to 16,817 tons versus 17,056 tons in 2022.  Average prices for VAM imports dropped from €2087.1 per ton to €1214.2 per ton. 

Maleic anhydride imports into Poland amounted to 10,145 tons in 2023, down from 12,264 tons in the previous year.  Imports were sourced in 2023 from Germany (4,492 tons), Hungary (2,836 tons) and South Korea (1,853 tons).  Maleic anhydride was previously produced at Kedzierzyn-Kozle, using benzene as a feedstock. 

Isopropanol imports into Poland amounted to 11,359 tons in 2023 against 12,587 tons in 2022.  Aside Germany imports came last year from the Netherlands and South Africa.  Orlen was considering the construction of an isopropanol plant at Plock to meet domestic demand, but this investment depends on the completion of the delayed phenol project. 

Ethylene oxide imports into Poland totalled 21,769 tons in January to December 2023 versus 11,504 tons in January to December 2022.   Germany currently represents the main source of inward shipments. 

Ethylene glycol imports increased in 2023 to 106,293 tons versus 52,315 tons in 2022.  Belgium supplied the largest volume of glycols to the Polish market, shipping 91,405 in 2023.   DEG imports increased in 2023 to 30,343 tons against 27,949 tons, whilst propylene glycol amounted to 19,431 tons against 18,688 tons in 2022.  Poland also exports glycols, although in less volume than exports.  Ethylene glycol exports totalled 20,423 tons in 2023 and propylene glycol 12,957 tons. 

Regarding export activity in organic chemicals, Polish shipments of monochloroacetic acid (MCAA) rose sharply in 2023 to 37,883 tons against 16,405 tons in 2022.  MCAA production is undertaken by the PCC Group at Brzeg Dolny.  The destinations for Polish MCAA exports are spread throughout Europe including Germany, Italy, France and Spain.  Market prices for MCAA have been rising since the start of 2024 due to a rise in energy and feedstock costs.

Other organic chemical exports from Poland include acetone where shipments amounted to 12,676 tons in 2023 versus 14,240 tons in January to December 2022.   The main markets for Polish acetone exports included Italy, Germany, Romania and Lithuania.

Normal butyl acetate exports dropped from 16,318 tons to 10,155 tons in January to December 2023.  The largest destination for Polish butyl acetate exports is Germany, accounting for 4,252 tons in 2023 for a value of €5.998 million. 

Methanol represents the largest organic chemical export commodity for Poland despite the lack of domestic production.  Exports dropped in 2023 to 264,268 tons against 425,483 tons in 2022.  Although export volumes are expected to be lower in 2024, Polish methanol traders play an important role in distributing product in Central Europe.  The closure of the Ukrainian railways to Russian methanol shipments has meant that consumers particularly in South East Europe have been forced to seek out alternative sources with Poland in some cases acting as the transit hub. 

Central European methanol trade Jan-Dec 2023

Czech imports of methanol amounted to 77,139 tons in 2023 against 78,773 tons in 2022.  Russia accounted for 6,237 tons against 27,641 tons in January to December 2022 whilst imports from Poland increased from 41,514 tons to 57,175 tons.  Prices per ton for methanol imports into the Czech Republic dropped from €462.7 in 2022 to €373.6 in January to December 2023. 

Methanol imports into Poland totalled 637,653 tons in January to December last year against 932,863 tons in 2022.  Average prices amounted to €306.7 per ton against €380.4 per ton last year.  Poland has been developing alternative sources to Russian methanol before the full embargo took full effect in June.   Apart from Venezuela and Belgium, other new sources arrived last year from the US and Trinidad.  

Norway supplied 102,928 tons of methanol to Poland in 2023 versus 30,160 tons in 2022, whilst imports into Poland from Russia dropped from 731,655 tons to 188,185 tons.   Trinidad supplied 43,348 tons in 2023 and Venezuela 66,759 tons of which 28,000 tons were shipped in December 2023. 

Exports of methanol from Poland amounted to 264,289 tons in January to December against 425,483 tons in January to December 2022.  Exports declined in 2023 due to lower imported volumes after the sanctions imposed on Russia took full effect after 18 June.  Although Poland does not produce methanol it does export part of the imported product it receives and makes a profitable return from its sales to European customers.  The price differential between imported methanol into Poland and exported from Poland amounted to an average of €75 per ton in 2023.  

The largest destination for Polish exports in 2023 was Germany which took 79,930 tons against 107,709 tons in 2022.  Ukraine imported 25,175 tons of methanol from Poland in 2023 against 18,484 tons in 2022.

Revenues from Polish exports of methanol dropped from €180.176 million to €96.269 million in January to December 2023, with average export prices declining from €422.3 per ton to €356.4 per ton.  

Methanol imports into Hungary in the first eleven months in 2023 dropped to 80,977 tons against 103,823 tons in the same period in 2022.  Imports from Russia dropped from 21,526 tons to zero and from Slovakia from 21,835 tons to 4,591 tons.  Imports from Poland declined due to the embargo on Russian methanol, but still amounted to 10,311 tons.  The largest suppliers to the Hungarian market last year include Germany which provided 30,223 tons and the Netherlands which supplied 23,457 tons. 

Azerbaijan has replaced some of Russia’s previous market share in Europe.  The top five importers of methanol from Azerbaijan include Romania, Italy, the Netherlands, Spain and Lithuania.   Exports to the EU from Azerbaijan’s SOCAR plant amounted to 260,700 tons in 2023 which was 0.4% down from 2022.   

Romania imported 82,300 tons of methanol from Azerbaijan in 2023 against 60,100 tons in 2022, whilst the Netherlands reduced imported from 105,800 tons in 2022 to 71,300 tons.    

Grupa Azoty melamine restart

Grupa Azoty resumed the Melamine 111 unit at Pulawy at the end of January. The maximum production capacity of the Melamine III unit, 90 tons per day, represents approximately one third of the rated capacity of all melamine units at the subsidiary. 

Grupa Azoty energy costs  

Production of fertilisers, plastics and chemicals all recorded lower volumes in 2023 against 2022.  Grupa Azoty’s energy costs have been the main factor behind the group’s losses and reduced production volumes.  Losses had been restricted through lower production last year, but this represents only a short-term solution.  Raw material costs were less of a problem than in 2022 and actually dropped in numerous sectors but energy costs recorded an almost twofold increase. 

Grupa Azoty financial issues from Polimery Project

In addition to energy costs from 2023 the complicated issue of unexpected higher costs for the Polimery Police project may mean that Grupa Azoty has to write off a loss of zl 300 million due to the impairment of the assets of GA Polyolefins.  The reason for the impairment is the delays incurred by the contractor Hyundai combined with weaker shorter term and medium-term prospects of the polypropylene market. 

After submitting a request for revised project costs in November last year Hyundai Engineering submitted another proposal in February to postpone the completion date of the project by an additional 95 days. A proposal was also made to increase the remuneration for the EPC contract by €39.8 million.  Grupa Azoty Polyolefins is still analysing the request from November

As of 31 January 2024, the material progress of the Polimery Police project was 99.86%.  The last phase of the project is the most time-consuming.  After passing the integrity test for 72 hours and achieving all guaranteed parameters, the general contractor will proceed with the complete handover of the unit to Grupa Azoty Polyolefins, i.e. the completion of the Polimery Police project. Until then, Hyundai Engineering will be responsible for the implementation of the project and all existing infrastructure.

Russian base chemical production Jan-Dec 2023

Chemical production in Russia showed marginal gains in 2023 over 2022, with the exception of several products.  Of the larger scale commodities methanol experienced the biggest fall last year dropping from 4.506 million tons in 2022 to 3.891 million tons.  Overall, the industry held up better than Russian producers had expected at the start of the year.  On the surface at least most plants are running relatively normally, although sanctions are impacting on investment.

Prices for chemicals and chemical products dropped by 10.9% against 2022, mirroring chemical prices in Europe and Asia.  During 2023, the cost of finished rubber and plastic products either slightly decreased or remained at the same level for a fairly long period.  

Based on the cross-section of products listed in the table, which covers a broad spectrum of the chemical industry, by quarter production has not changed significantly since the Russian invasion stared in February 2022 followed by sanctions.  The worst period in the period 2021-2023 was recorded in the third quarter last year when methanol production dropped, and this was coupled with downtime at several ethylene plants. 

The main challenges currently facing chemical producers in Russia consist of logistics, infrastructure and freight costs.  One of the main causes of lower profits recorded in the first three quarters in 2023 for many producers included higher transport costs for shipments to China.  Longer term acquiring technology represents a key question for many companies who are unable to replace Western licensors.

Russian polymer production Jan-Dec 2023