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Central European Petrochemical Production

Russian-Chinese polymer trade

Product and Company News, Data and Analysis from CIREC's online resources

Russian Methanol Market 2022

Russian-Chinese Polyolefin & Synthetic Rubber Trade

MOL crude purchases 2023

Russia accounted for 65.5% of MOL’s crude purchases in January and February this year from the total volume of 959,842 tons, but by value the share only amounted to 54.6%.  The EU price cap meant that Russian crude equated to €319.5 per ton in February against €325.1 per ton in January, which is much lower than other sources from Croatia, Iraq and Kazakhstan.  Around 18% of imports into Hungary in the first two months came from Kazakhstan, priced at $541.1 per ton January and €584.4 per ton in February, whilst Iraq provided only 11% of crude in the first part of 2023 at average prices of €416.0 per ton.  

Although Russia is the dominant source of imported crude into Hungary at present efforts continue to develop other sources.  Other EU countries are competing for the same sources and thus whilst the objective is to fully diversify there is no coordinated strategy.

Crude processing and sales volumes for MOL decreased by 7% and 6% respectively in the first quarter in 2023, largely due to the strong correction of the Hungarian fuel market.  MOL’s refining margins remained strong over the Q1 2023 period but a marked refinery margin decrease followed in April setting the trend for lower numbers this year.

Prices advantages of Russian crude into Central Europe

Imports of crude into the Czech refineries amounted to 1.827 million tons in the first quarter this year against 1.649 million tons in January to March 2022.  Czech imports of crude oil in the first quarter this year were divided roughly between Azerbaijan, Russia and Kazakhstan. 

Russia accounted for 63% of volume imports, whilst in value this translated into 49%.  The reason for the lower percentage share in value than volume is due to the price cap imposed by the EU in December last year.  The second largest supplier to the Czech Republic Azerbaijan provided 29% of deliveries in the first quarter this year by volume, but 40% by value.  Kazakhstan supplied 8% of Czech crude in the first quarter this year by volume and 11% by value. 

Poland did not purchase any crude from Russia in March. In financial terms it meant that PKN Orlen did not take advantage of the price cap.  Saudi Arabia provided just under 50% of total crude imports into Poland in the first quarter, shipping 3.278 million tons for an average price of €572.0 per ton.  Last year Saudi Arabia supplied 7.086 million tons of crude to Poland which is expected to double in 2023.  In Lithuania Orlen Lietuva plans this year to use only oil supplied by Saudi Arabian oil company Saudi Aramco.

Central European ethylene production Jan-Mar 2023

Ethylene production in the four countries that comprise the Visegrad Group region amounted to 350,800 tons in the first quarter this year.  This measured against 347,100 tons in the fourth quarter in 2022 but down from 398,900 tons in the same period last year. 

PKN Orlen is in the early stages of work on its Olefins III investment which overall represents a larger project than the Polimery Police project in Poland which is near completion.   It is also bigger than MOL’s polyol project in Hungary and Slovnaft’s cracker modernisation in Slovakia.  Hyundai Engineering is the main project contractor and already 1,300 workers are on site.

Polish petrochemical production Jan-Mar 2023

Ethylene production in Poland dropped from 41,100 tons in January to March 2022 to 31,100 tons this year whilst propylene fell from 114,900 tons to 87,400 tons.  Butadiene production at Plock dropped to 15,900 tons from 17,500 tons.  In the plastics sector polyethylene production dropped to 77,300 tons in January to March 2023 versus 82,900 tons in corresponding period last year and polypropylene dropped from 92,700 tons to 72,500 tons.

Central European petrochemical margins

Central European petrochemical margins have been lower this year against the same quarter last year although April data provided a slight lift for both PKN Orlen and MOL. 

The peak for petrochemical margins in the past eighteen months was achieved in April 2022 when Orlen achieved €1456 per ton and MOL €725 per ton, but both these were lower than in April 2021.  MOL’s margin was much lower in 2022 after the calculation process was changed at the end of 2021.  In April this year Orlen’s petrochemical margin rose slightly to €1052 per ton against €1048 in March whilst MOL rose from €329 to €371 per ton.

Central European propylene production Jan-Mar 2023

Propylene production in the four Central European countries amounted to 234,400 tons in the first quarter this year.  This measured against 247,700 tons in the fourth quarter in 2022 and 269,900 tons in the same period last year.  Regarding current expansions, MOL is currently building a PDH propylene plant at Tiszaujvaros and Slovnaft increasing capacity as part of its steam cracker modernisation. 

Czech propylene imports Jan-Mar 2023

Propylene imports into the Czech Republic rose from 9,410 tons in January to March 2022 to 13,761 tons this year, with main suppliers including Germany, Romania and Poland.  Czech imports of butadiene amounted to 24,759 tons in January 2023, all of which was supplied by Germany and Hungary.

Polish propylene & butadiene imports, Jan-Mar 2023

Poland imported 25,435 tons of propylene in January to March against 47,794 tons in January to March 2022.  Market sources of propylene imports into Poland changed significantly in 2022.   Imports from Ukraine dropped from 17,018 tons in January to March last year to zero this year due to idled production facilities at Kalush, whilst also imports from Russia have also disappeared from the market due to sanctions. 

Average prices for propylene imports into Poland declined from €1215.5 per ton in January to March 2022 to €972.5 in the January to March 2023.  Prices started falling in the latter part of the third quarter and into the fourth quarter following feedstock trends.  In addition to propylene Poland imported over 3,500 tons of ethylene in March. 

Butadiene import prices dropped from €955.219 per ton in January to March 2022 to €925.384 in January to March this year, with volumes declining from 8,742 tons to 6,759 tons.  Synthos is constructing a new butadiene plant at Plock based on a licence from BASF. The project is being carried out for Synthos by Air Liquide Global E&C Solutions Poland as part of a comprehensive service covering design, engineering, picking of supplies and construction and supervision of the process of commissioning the new plant. The commissioning of the butadiene extraction plant and commencement of the production is scheduled for 2024 with a capacity of 120,000 tpa.

Propylene-propane supplies Polimery Police

Propylene was delivered to the Polimery Police plant in April, delivered by rail by Grupa Azoty ZAK.  The propylene delivered to Police is necessary to test the polypropylene installation before acceptance of propylene from its own production from the PDH unit.  For full testing the PP plant, Grupa Azoty Polyolefins estimates that it needs to purchase up to 4,000 tons of propylene.  The next stage, after accepting the entire volume, will be a test launch of the PP plant on propylene purchased from an external source.  The Polimery Police project is already at the stage of final tests. 

A further agreement for the purchase of propane was concluded on 27 April this year with TOTSA Total Energies Trading SA provides for the implementation of propane, covering deliveries from April 2023 to the end of November 2024, according to the agreed schedule and trading conditions.

Propane deliveries carried out under this agreement will constitute supplementary deliveries, accounting for roughly 46% of total requirements.  Grupa Azoty Polyolefins announced the first propane purchase agreement at the end of 2022, under which propane supplies in over 50% of demand in 2023-2024 were secured.

Hungarian propylene exports Jan-Feb 2023

Exports of propylene from Hungary increased in the first two months to 19,011 tons against 17,698 tons in the same two months in 2022.   Exports to Slovakia from MOL to Slovnaft rose from 13,535 tons to 19,011 tons which was the sole destination so far in 2023.

Although MOL currently produces more propylene than it consumes it is currently building a new propylene plant with a capacity of 100,000 tpa. This is part of the programme to create sufficient propylene feedstock for the new polyol project at Tiszaujvaros. 

The propylene plant is being constructed by the engineering company Merkbau on an area of about three hectares at the site of MOL Petrochemicals at Tiszaújváros.  The new plant will fit into the existing production infrastructure, providing raw materials for the polyol plant, thus expanding the company's chemical production capacity.  The polyol plant under construction at Tiszaujvaros has been subject to several delays since 2017.  MOL had hoped to finish construction in mid-2022 but now the target is sometime in 2023.

 Hungarian butadiene exports amounted to 10,124 tons in the first two months in 2023 against 10,211 tons in the same period in 2022.  Shipments into Poland totalled 4,055 tons in January to February 2023 against 6,182 tons in the same period in 2022.  Exports to Germany dropped from 2,029 tons to 1,995 tons and to the Czech Republic rose from 2,000 tons to 4,075 tons.  Average prices for Hungarian butadiene exports fell to €939.918 per ton versus €869.366 in 2023. 

Central European styrene trade Jan-Mar 2023

Poland imported 19,220 tons of styrene in January to March against 19,920 tons in January to March last year.  The Netherlands provided 8,583 tons in the first quarter versus 10,450 tons in the same period in 2022.  The Czech Republic has also been an important supplier this year.  Styrene import costs dropped from €1878.9 per ton last year to €1198.6 in the first quarter 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 12,618 tons in January to February 2023, down from 16,893 tons in the same period in 2022, with supplies from Italy declining from 16,436 tons to 11,893 tons.

Czech petrochemical trade, Jan-Mar 2023

Ethylene exports from the Czech Republic amounted to 3,306 tons in January to March 2023 versus 4,239 tons in the same period last year.  Czech imports of ethylene amounted to 9,058 tons in January to March 2023, down from 11,138 tons in January to March last year. 

Propylene imports into the Czech Republic rose from 9,410 tons in January to March 2022 to 13,761 tons this year, with main suppliers including Germany, Romania and Poland.  Czech imports of butadiene amounted to 24,759 tons in January 2023, all of which was supplied by Germany and Hungary. 

Czech exports of ethylbenzene amounted to 32,986 tons against 29,259 tons in January to March 2022.  All the ethylbenzene was shipped from Kralupy to Oswiecim, all within the structures of the Synthos Group.  Imports of benzene into the Czech Republic dropped from 18,846 tons in January to March last year to 10,931 tons in January to March 2023.

Central European polyethylene production Q1 2023

First quarter production of polyethylene in Central Europe amounted to 288,300 tons against 287,400 tons in the same period in 2022.  Hungarian production of polyethylene dropped in the first quarter to 143,000 tons from 157,000 tons in the same period in 2022. 

LDPE production at Tiszaujvaros fell to 57,000 tons from 65,000 tons in the first quarter in 2022 whilst HDPE fell from 92,000 tons to 86,00 tons.  Polish polyethylene production amounted to 77,300 tons in the first quarter against 82,900 tons in January to March 2022. 

Polish polyethylene trade Jan-Mar 2023

Polish trade in polyethylene was down in the first quarter for both imports and exports, both in volume and value.  Economic conditions affected both demand and pricing.   Polish imports of polyethylene totalled 297,491 tons in January to March this year against 373,509 tons in January to March 2022, with average prices falling from €1791.3 per ton to €1492.8 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 €444.084 million in the first quarter against €669.068 in January to March last year.  HDPE is the largest category of imported polyethylene into Poland, amounting to 104,504 tons in January to

March versus 126,134 tons in January to March 2022.  Germany was the largest supplier of HDPE to the Polish market in the first quarter this year, shipping 31,847 tons for a total value of €48.111 million.

Polish polyethylene exports amounted to 72,793 tons in the first quarter in 2023 against 96,603 tons in the first quarter in 2022. Average prices for polyethylene exports from Poland declined to €1483.6 per ton against €1601.1 per ton. 

Revenues from exports decreased from €154.667 million to €107.989 million in January to March 2023.  In the first quarter this year exports of HDPE from Poland amounted to 49,934 tons versus 68,048 tons in January to March 2022.

Czech polyethylene trade Jan-Mar 2023

Prices for both exports and imports of polyolefins were lower in the first quarter this year against the same period in 2022.  Polyethylene exports amounted to 95,697 tons in the first quarter of which HDPE comprised 84,744 tons.  Germany was the largest destination for Czech HDPE supplied from Litvinov this year, amounting to 36,983 tons in January to March for €47.465 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 73,255 tons in January to March against 83,865 tons in the same period in 2022, with prices dropping from €1902.5 per ton to €1727.1.  Germany was the largest source of polyethylene imports, amounting to 18,218 tons for €29.406 million, followed by Belgium with 8,592 tons for €15.320 million.

Hungarian polymer trade Jan-Feb 2023

MOL’s polyethylene exports dropped from 74,664 tons in January to February 2022 to 59,047 tons in the same period this year whilst revenues fell from €110.055 million to €78.076 in 2023.  Average prices dropped from €1474.0 per ton in 2022 to €1322.3 per ton in 2023.  Overall, for last year Hungarian polyolefin trade in terms of volume differed only slightly by volume against 2021, but in terms of values the prices were much higher in 2022.

HDPE shipments from Hungary dropped from 45,927 tons in January to February 2022 to 39,106 tons in the same two months in 2023, whilst exports of LDPE dropped from 17,952 tons to 17,226 tons.   From MOL’s HDPE exports, leading destinations involved Italy and Germany. 

Polyethylene imports into Hungary amounted to 31,654 tons in the first two months in 2023 against 32,978 tons in the same period in 2022.  HDPE imports dropped from 14,760 tons to 12.876 tons in January to February 2023, whilst LLDPE imports decreased from 9,563 tons to 8,044 tons.  Imports of LDPE rose from 2,913 tons to 4,145 tons.  Imports costs for polyethylene fell to €54.760 million against €59.515 million in the same period last year.  Prices per ton increased from €1817 to €1730 in 2022. 

Central European polypropylene production Q1 2023

Production of polypropylene in Central Europe in the first quarter amounted to 272,500 tons against 285,900 tons in the same period in 2022, although was higher than in the second and third quarters of last year.

Hungary reduced production of polypropylene in the first quarter to 128,000 tons against 137,000 tons in January to March 2022 and Poland reduced production from 92,500 tons to 72,500 tons.  Slovakia produced 60,000 tons in the first quarter this year and the Czech Republic 70,000 tons.

Regional investment in PP and expansions

Linde Engineering was selected by Slovnaft in 2022 to conduct a complex large-scale revamp of the polypropylene (PP3) plant at Bratislava.  The revamp will extend the plant’s capacity by 18% or 33,000 tpa to 300,000 tpa of polypropylene, and the storage facility will be expanded from the current 45 silos to 61 silos.  Slovnaft is investing around €63 million in the expansion and modernisation of polypropylene production. 

Regarding the new plant at Polimery Police a pre-marketing project was launched on the PPL (Polypropylene Logistics Platform) sub-project in January in readiness.  The plant should enable the diversification of Grupa Azoty's business activities, as well as have a positive impact on the Polish's position in the plastics segment. The new chemical complex will significantly improve the balance of polypropylene in which Poland currently import-dependent. 

In 2022 Poland imported a total of 918,765 tons of polypropylene, comprised mostly of homo grade and copolymers.  The capacity of the new plant comprises 437,000 tpa, which will add to the existing 480,000 tpa plant at Plock which is owned by Basell Orlen Polyolefins.  The Plock plant was expanded by around 20% in the past couple of years following the start-up of the metathesis propylene plant operated by PKN Orlen.  The overall material progress of the EPC Contract for Polimery Police, as of 4 April 2023, had achieved 99.29% of the project schedule  

Polish polpropylene trade Jan-Mar 2023

Polish polypropylene imports, including homo grade and copolymers, fell in January to March 2023 to a total of 201,711 tons versus 276,586 tons in January to March 2022.  Average prices per ton decreased from €1804.7 to €1547.22 per ton.  Homo grade polypropylene imports dropped from 183,616 tons in the first quarter in 2022 to 128,085 tons in the same period this year whilst copolymer imports dropped from 86,953 tons to 68,568 tons.  Germany supplied 21,557 tons of propylene copolymers to Poland in the first quarter followed by the Netherland with 11,247 tons for €17.845 million and Belgium supplying 10,456 tons for €17.712 million. 

Regarding export activity, shipments amounted to 62,927 tons against 85,633 tons in January to March 2022.  Homo polymer grades comprised the main category of Polish polypropylene exports, where Germany was the largest destination taking 10,231 tons in the first quarter for €13.736 million followed by the Czech Republic taking 7,024 tons for €9.448 million. 

Czech polypropylene trade Jan-Mar 2023

For imports of all forms of polypropylene, Czech inward shipments dropped from 136,714 tons in January to March 2022 to 127,319 tons in January to March this year, with average prices dropping from €1850.8 per ton to €1693.7. 

Propylene copolymer imports increased from 50,614 tons to 52,625 tons.  Copolymer imports were sourced not only from European suppliers but also South Korea which shipped 8,236 tons for €12.732 million in January to March this year. 

Exports of all forms of polypropylene from the Czech Republic amounted to 78,881 tons in January to March versus 80,456 tons in January to March 2022, with average prices dropping from €1675.9 per ton from €1530.7. 

Homo-grade PP provides the main category of Czech polypropylene exports, amounting to 64,441 tons in January to March this year, with 15,640 tons sent to Germany for €22.546 million. 

Hungarian polypropylene trade Jan-Feb 2023

Regarding Hungarian polypropylene exports, MOL shipped 22,690 tons of homo grade polypropylene in January to February 2023 which was up from 20,765 tons in the same period in 2022, whilst copolymer exports dropped from 18,843 tons to 16,363 tons. 

The most important destinations for Hungarian polypropylene exports include Poland, Italy, Germany and the Czech Republic.

Export revenues dropped for all grades of polypropylene from €78.137 million to €57.250 million, with average prices dropping from €1593.2 per ton to €1385.1 in the first two months in 2023.  Copolymer exports are distributed mostly to European destinations, of which the largest include Italy, Germany, Poland and Romania.  In 2022 Hungary exported a total of 40,039 tons of polypropylene for revenues of €63.786 million. 

Polypropylene imports into Hungary amounted to 32,342 tons in the first two months in 2023 versus 34,054 tons in the same period in 2022, with costs falling in January-February 2023 to €51.511 million from €68.821 million last year.  Overall average prices dropped from €1785.1 per ton to €1592.7 per ton this year, whilst copolymer prices dropped from €1847.9 to €1419.7. 

By category homo grade imports into Hungary comprised 19,172 tons in January to February 2023 against 22,474 tons whilst copolymers fell to 9,434 tons against 11,476 tons in 2022.  Costs for copolymer imports dropped to €13.392 million.

Synthetic rubber prices Jan-Mar 2023

Rubber prices in Europe started dipping in October-November last year and the continued into the first quarter. Export prices dropped from €2103.9 per ton in January to €1877.9 in March whilst import prices dropped from €1931.2 per ton to €1686.6 per ton.  Natural rubber prices ended the quarter facing a different range of market fundamentals.  Currently the forecast for natural rubber prices indicates a mixed outlook, which is reflected also for synthetic rubber where demand has been supressed this year.  

Czech synthetic rubber trade Jan-Mar 2023

Czech exports of synthetic rubber amounted to 42,251 tons in January to March this year versus 53,087 tons in the same three months in 2022.  Imports declined from 37,291 tons to 32,640 tons in January to March 2023.  Natural rubber imports into the Czech Republic rose from 20,268 tons in the first quarter last year to 21,679 tons. 

Exports of ESBR from the Czech Republic dropped in the first quarter to 8,894 tons against 20,813 tons in the same quarter last year.  Although average prices were higher in the first quarter at €1767.5 per ton against €1725.7 per ton in 2022, production costs have been much higher this year.  Earlier in 2023 Synthos announced that it had decided to close the emulsion styrene butadiene rubber (ESBR) line at its Kralupy nad Vltavou site in the Czech Republic.  Synthos explained the closure through the unsustainable rise in utility costs in Europe.  The Kralupy plant includes capacities of 110,000 tpa of ESBR and its permanent closure will reduce Synthos’ total ESBR capacity to 320,000 tpa.  Despite the closure of the Kralupy plant, Synthos remains the largest producer of ESBR in Europe, with 190,000 tpa of ESBR capacity at its site at Oswiecim and 130,000 tpa at Schkopau. 

Czech butadiene rubber trade 2022

The Czech Republic exported a total of 28,031 tons of butadiene rubber in the first quarter in 2023 against 28,309 tons in the same period in 2022.  Revenues were up slightly from 51,849 tons to 52,498 tons period January to March 2023, with average prices rising from €1831.5 per ton to €1872.8 per ton.  Despite the higher prices this year the trend is set for lower prices in the second quarter. 

The largest destination for Czech exports of butadiene rubber is India to where 4,198 tons was shipped in 2022 against 5,399 tons in the same period in 2021.  Other important markets included Poland where exports amounted to 3,761 tons in the first quarter this year against 3,598 tons in the same quarter in 2022, and South Korea rising from 1,819 tons to 3,372 tons.  Synthos at Schkopau has started the process of operating the butadiene rubber plant.  The recommissioning was undertaken by Synthos in reaction to increased demand due partly to sanctioning of Russian imports of butadiene rubber into the EU.  The plant capacity is 30,000 tpa.

Hungarian synthetic rubber imports Jan-Feb 2023

Hungarian imports of synthetic rubber dropped slightly by volume in the first two months this year to 26,407 tons against 27,159 tons in the same period in 2021.  Overall costs of synthetic rubber imports increased on average from €2042 per to €2520 per ton. 

Butadiene rubber imports rose from 8,715 tons to 13,112 tons, with costs rising from €15.685 million to €29.778 million. Indonesia supplied 7,612 tons to the Hungarian market in January-February 2023 more than offsetting the disappearance of Russian butadiene rubber. 

Imports of halogenated butyl rubber have been most affected by EU sanctions, but still continue to find their way into European markets.  Russia sent 11,574 tons of halogenated butyl rubber to Hungary in 2022 against 17,074 tons in 2021. 

Polish rubber trade Jan-Mar 2023

Poland imported 64,773 tons of synthetic rubber in January to March this year against 78,107 tons in January to March last year.  Due to EU sanctions imports of synthetic rubber from Russia into Poland slowed sharply in the second half of 2022 but have been given a lifeline with the extended date for sanctions.  Isoprene rubber has thus far been excluded from sanctions and this now comprises the main share of rubber export shipments from Russia to Poland. 

Products such as butadiene rubber and halogenated butyl rubber had seen imports drop to very small amounts after sanctions took effect in July.  It seems now that these earlier sanctions have been loosened. 

Poland imported 2,424 tons of halogenated butyl rubber from Russia in January to March this year from a total of 3,168 tons.  For butadiene, imports from Russia amounted to 5,325 tons in the first quarter this year from the total of 15,569 tons.  This made Russia the largest supplier to the Polish market followed by Czech imports which amounted to 3,027 tons. 

First quarter synthetic rubber exports amounted to 71,114 tons in the first quarter against 87,045 tons in January to March 2022.   Exports of butadiene rubber from Poland amounted to 12,632 tons in January to March versus 10,989 tons last year. 

Synthos-production Jan-Mar 2023

Synthetic rubber production at Oswiecim for Synthos amounted to 59,300 tons in January to March 2023 from 72,300 tons in the same period in 2022.  Synthos produced 17,400 tons of general polystyrene at Oswiecim in January to March versus 18,400 tons in the first quarter last year whilst expandible polystyrene fell from 25,700 to 23,500 tons. 

A primary focus of Synthos in Poland includes the development of green energies not only for the company’s own usage but also wider applications in the Polish economy.  Orlen Synthos Green Energy (OSGE) has recently applied to the Ministry of Climate & Environment for a fundamental decision for six NPPs with BWRX-300 small modular reactors (SMRs). The decision will formally confirm that the investment in the nuclear plants is in line with the public interest and the policies implemented by the state, including energy policy. This decision will also authorise the investor to apply for a decision to determine the location and other decisions necessary for the preparation, implementation and operation of the facilities.

In December 2021, GE Hitachi, BWXT Canada and Synthos Green Energy (SGE) signed a Letter of Intent to cooperate in deploying BWRX-300 SMRs in Poland. OSGE is a joint venture between Synthos Green Energy SGE and PKN Orlen. In July 2022 OSGE submitted an application to Poland's National Atomic Energy Agency for the assessment of GE Hitachi Nuclear Energy's BWRX-300.

Polish benzene exports Jan-Mar 2023

Polish exports of benzene totalled 37,010 tons in January to March against 46,465 tons in the same period last year.  Average prices dropped to €838.8 per ton against €1000.1 per ton in January to March last year.  Germany purchased 28,088 tons from Poland in the first quarter and the Czech Republic 7,700 tons.  Benzene exports from Poland were lower in the first quarter due to the problems for Petrochemia Blachownia in receiving coal based raw materials from Ukraine.  Petrochemia Blachownia is part of the Czech Agrofert group and announced a reduced operating load in January this year due to the war.

Polish-Czech aromatic imports Jan-Mar 2023

Phenol imports into Poland amounted to 20,924 tons in January to March 2023 for €27.3 million.  Russia had been one of the main suppliers of phenol to Poland in the first half of 2022 although volumes in May started to show signs of softening even before EU sanctions were introduced.  In January to March this year Germany was the dominant supplier of phenol to Poland, shipping 15,700 tons for €21.3 million.

In other product areas, styrene imports amounted to 19,220 tons in the period January to March 2023 versus 27,597 tons in the same period in 2022 whilst ethylbenzene imports rose from 29,269 tons to 32,990 tons.  Nearly all of the ethylbenzene imports come from the Czech Republic.  Czech benzene imports dropped in the first quarter to 10,931 tons against 18,846 tons in the same period in 2022, whilst toluene imports dropped to 1,802 tons and styrene rose to 5,924 tons. 

Central European caprolactam market

Grupa Azoty Zaklady Azotowe Pulawy decided to suspend caprolactam production from 10 March, together with the operation of the Melamine III unit.  High costs were cited as the main factor behind the stoppage which will stay in place until further notice.  In the first quarter Poland produced 27,300 tons of caprolactam against 43,400 tons in January to March last year. 

The Czech Republic exported 2,407 tons of caprolactam in January for €4.969 million.  All of the exports were shipped to European countries.  Italy was the largest destination for Spolana’s exports in 2022. 

Polish PTA exports Jan-Mar 2023

PTA exports from Poland amounted to 53,011 tons in January to March this year against 109,138 tons in January to March 2022, with average prices rising from €848.3 per ton to €898.3 per ton.  The key factor this year behind the lower purchases was that Germany reduced purchases from 93,572 tons to 53,011 tons.   Switzerland was the second largest destination for PTA export shipments, taking 2,560 tons. 

Hungarian TDI-MDI exports Jan-Feb 2023

Hungarian TDI exports dropped in the first two months this year to 38,795 tons against 54,253 in the same two months in 2022.  Average prices rose from €2499.7 per ton to €3204.9 in 2023.  Higher prices helped meant that from €140.187 million to €124.341 million.  Price rises were driven largely by feedstock costs, particularly for toluene where prices rose from €650.5 per ton in 2021 to €1088.5 in 2022.

Exports of TDI from Hungary are delivered to throughout Europe, with the largest destinations in Central Europe led by Poland and Romania.  In West Europe Italy and Belgium are major markets whilst in Asia minor Turkey is a major recipient.  Exports to Poland amounted to 31,663 tons in 2022 for €97.492 million, whilst volumes to Turkey amounted to 32,917 tons for €92.494 million.

Exports to Belgium dropped from 8,144 tons in the first two months last year to 7,684 tons in January to February 2023 whilst volumes to Italy fell from 7,084 tons to 5,474 tons.  Shipments to Poland fell from 6,512 tons to 5,012 tons and Romania from 2,675 tons to 2,089 tons.

MDI exports from Hungary dropped in the first two months to 25,742 tons from 40,609 tons in the same period last year.  The most significant drop in sales was the US where no shipments were made in the first two months against 9,708 tons in 2022.  In contrast to higher TDI prices, MDI export prices dropped from €2465.6 per ton in January to February 2022 to €2268.5 per ton this year.

Poland was the largest destination for Hungarian MDI exports, shipping 6,428 tons in the first two months in 2023 versus 7,814 tons in the first same period in 2022.  Romania is the second largest market in Central and South East Europe, taking 20,311 tons in the whole of 2022 versus 22,540 tons in 2021.  In the first two months this year exports to Romania dropped from 4,442 tons to 3,414 tons.

MDI imports into the Czech Republic totalled 9,062 tons in January to March 2023 against 9,014 tons in the same period in 2022.  Average prices rose from €2321.2 per ton to €2601.8. The leading supplier was Hungary which shipped 3,256 tons in the first quarter against 1,352 tons in the same period last year.  TDI imports into the Czech Republic imports into the Czech Republic amounted to 1,718 tons in January to March this year versus 2,000 tons in January to March 2022.

MDI imports into Poland totalled 31,847 tons in January to March 2023 against 40,624 tons in January to March last year.  Due to lower volumes overall costs for MDI imports into Poland dropped from €95.698 million to €75.853 million, with average prices rising slightly from €2355.7 per ton to €2381.8 in January to March 2023.  Germany reduced shipments to €23.243 million by value down from €30.620 million last year, whilst imports from Hungary dropped from €28.506 million to €22.172 million.

TDI imports into Poland amounted to 16,804 tons in January to March against 20,747 tons in the same period in January to March 2022.  Values in January amounted to €54.845 million, equating to €3263.8 per ton, against €53.709 million in total last year at a price of €2588.7 per ton.  The cost of toluene was one of the factors behind the rise in TDI prices.

Czech polyol imports Jan-Mar 2023

Czech polyol imports increased in the first quarter to 12,351 tons against 10,752 tons in the same period in 2022, with average prices rising from €2682.7 per ton last year to €2746.7 in the first quarter in 2023.  The leading supplier to the Czech market was Belgium which shipped 3,690 tons in the period January to March 2023 against 2,599 tons last year, followed by Germany which exported 2,268 tons down from 2,357 tons. 

Polish polyol trade Jan-Mar 2023

Polish polyol imports amounted to 33,547 tons in the first three months in 2023 against 42,466 tons in the same period in 2022.  The major sources of imports came from Belgium, Germany and the Netherlands.  Polyol import costs dropped in the first three months to €75.142 million from €109.344 million in January to March 2022 with average prices dropping from €2574.9 per ton to €2230.6 per ton.  The largest source of imports came from Germany in the first three months, amounting to 8,427 tons against 8,687 tons in the same period in 2022.

Exports of polyols from Poland in the first quarter amounted to 14,992 tons against 13,986 tons in the same period in 2022.  Destinations for deliveries were focused mostly on Europe, led by Italy taking 1,864 tons in the first quarter followed by Hungary with 1,672 tons and Germany 1,255 tons.  Due to lower prices this year export revenues dropped from €41.773 million to €34.976 million. 

PCC Rokita Q1 2023

From its production structure PCC Rokita’s chlorine division was the most successful in the first quarter.  The chlorine segment's EBITDA rose to zl 202.379 million against zl 107.505 million in the same period in 2022.  Despite lower numbers than in the third and fourth quarter last year pricing in the first quarter was still good enough to drive up revenues in the first quarter.  In the first quarter of 2023, the prices of soda lye were still 128% higher than in the previous quarter. 

By contrast to the chlorine division PCC Rokita’s polyurethane segment recorded further declines in the first quarter.  The EBITDA result dropped from zl 64.417 million in the first quarter last year to €17.738 in the first three months in in 2022. 

European polyol market

There is currently a significant oversupply of polyols on the market, reinforced by the arrival of products from Asia supplied by Chinese producers or large chemical corporations with factories in Asia.  The weak demand combined with extra supply has led to keen price competition in recent months resulting in lower profitability for European polyol producers.  Polyester polyols intended to a large extent for the production of rigid foams recorded declines. This situation has resulted from the slowdown in construction.

The chemical industry in Poland as with elsewhere in Europe is struggling with persisting high electricity prices due to the prices of basic fuels, including gas and coal and an increase in the prices of CO2 emission allowances.  These factors helped to suppress profitability for PCC Rokita in the first quarter. 

Chimcomplex Q1 2023

Chimcomplex’s turnover fell by 29.69% in the first quarter compared to the first quarter in 2022.  This caused directly by the decrease in the quantities sold by the company due to lower demand in the European market.  The operating result in the first quarter this year fell to €0.567 million compared to €15.195 million in the first quarter in 2022, mainly due to high costs for raw materials and utilities.  However, the fall in revenues was faster than the reduction in the costs of raw materials and utilities, thus affecting the operational profitability.

In the first quarter in 2023 polyols accounted for 44% of total sales where revenues dropped from €64.8 million in the first quarter last year to €37.7 million.  Chloralkalis accounted for 51% of sales with revenues rising from €41.1 million to €44.135 million.  Caustic soda prices accounted for the higher share of chloralkalis in total sales. 

Investments by Chimcomplex in the first quarter were directed to the modernisation and increase of capacity of the chlorine plant, which already uses membrane cells, leading to the production of green hydrogen.  Other investments included the modernisation and increase of capacity equipment of special polyols and oxo-alcohols, whilst improving the DOTP plant. 

Hungarian maleic anhydride exports Jan-Feb 2023

Hungary exported 3,149 tons of maleic anhydride in the first two months this year against 4,030 tons in the same period in 2022, with average prices dropping from €2192.7 per ton to €1317.7.  Italy was the largest destination of exports in the first two months in 2023 followed by Austria and Poland.

MOL’s maleic anhydride plant at Szazhalombatta possesses a capacity of 22,000 tpa, and the company is considering expansion.  Due to the technical complications of transporting liquid maleic over large distances product sales are mostly limited to destinations no more than two days from the plant.

Hungarian acrylonitrile imports Jan-Feb 2023

Hungary imported 5,293 tons of acrylonitrile in the first two months in 2023 against 6,288 tons last year.  The Netherlands was the main source of imports in both years, shipping 2,426 tons in January to February 2023 versus 3,853 tons in 2022.  Acrylonitrile prices dropped on average from €2205.6 per ton in the first two months last year to €2120.1 per ton in 2023. 

Hungarian aniline imports Jan-Feb 2023

Aniline imports into Hungary increased from 18,854 tons in the first two months in 2022 to 27,541 tons in the same period in 2023.  Inward shipments from China amounted to 7,251 tons which were delivered mostly in January. 

Belgium supplied 8,713 tons in the first two months this year.  BorsodChem-MCHZ supplied 11,576 tons from the Ostrava plant against 18,850 tons in the same period in 2022.  Cost prices of aniline imports dropped from €1629.5 per ton to €1450.1 in 2023. 

Polish organic chemical trade Jan-Mar 2023

The main feature of Polish organic chemical trade in the first quarter was the lower volumes compared to January to March 2022.  Exports of organic chemicals fell from 439,200 tons in January to March last year to 314,400 tons, whilst imports into Poland dropped from 823,700 tons to 660,800 tons.  High energy prices played a key role in driving up values last year which although have since come off the peak are still impacting on production and trade. 

Ethylene oxide imports into Poland totalled 4,304 tons in January to March versus 4,710 tons in January to March 2022.   Poland stopped importing ethylene oxide from Russia in May last year.  Regarding traditional trading partners imports of propylene and phenol from Russia have been sanctioned out of the Polish market and are not expected to restart in 2023 and for the foreseeable future. 

Methanol imports into Poland totalled 162,219 tons in January to March this year against 220,119 tons in the same period in 2022.  Although Russia reduced supplies from 166,466 to 107,130 tons it still remained the largest source of imports.  Already in December Poland had started to reduce shipments from Russia ahead of EU sanctions on Russian methanol which took effect from 8 January 2023.  Contracts signed prior to 7 October have been allocated grace of up to 18 June for completion, but no new business was permitted.

For other organic chemical imports Poland imported 10,229 tons of acetic acid in January to March against 12,167 tons in January 2022.  The US was the leading supplier in January to March, shipping 5,093 tons followed by the UK with 1,868 tons.  Ethyl acetate imports into Poland amounted to 5,355 tons in January to March this year against 4,071 tons in January to March 2022.  Belgium provided the largest share of imports. 

Regarding export activity in organic chemicals shipments of monochloroacetic acid (MCAA) rose sharply in the first quarter to 10,220 tons against only a few hundred tons in the same period in 2022. MCAA production is undertaken by the PCC Group at Brzeg Dolny.  Other organic chemical exports include acetone where shipments amounted to 3,993 tons in the first quarter this year vs 2,600 tons in January to March 2022.

Central European methanol trade Jan-Mar 2023

Czech imports of methanol amounted to 20,039 tons in the first quarter this year against 20,855 tons in the same quarter in 2022.  Russia accounted for 2,293 tons against 9,348 tons in January to March last year whilst imports from Poland increased from 8,869 tons to 13,311 tons.  Prices per ton for methanol imports into the Czech Republic dropped from €423.162 in the first quarter last year to €382.165 in January to March 2023.

 Imports of methanol into Poland totalled 162,229 tons in January to March this year versus 220,194 tons in January to March 2022 with Russia reducing shipments from 166,466 tons to 107,130 tons.   Average prices amounted to €304.840 per ton against €347.799 per ton last year.  Poland has been seeking alternative sources to Russian before the full embargo takes effect; Venezuela supplied 12,706 tons in March and Belgium 8,363 tons. 

Exports of methanol from Poland amounted to 86,483 tons in January to March against 85,662 tons in January to March 2022.  Revenues from Polish exports of methanol rose from €10.004 million in the first quarter this year to €11.569 million in January to March 2023, with export prices dropping from €413.951 per ton to €389.985 per ton.  Ukraine imported 7,364 tons of methanol from Poland in the first three months.

Methanol imports into Hungary increased from 10,766 tons in the first two months in 2022 to 12,861 tons in same period in 2023.  Imports from Russia dropped from 5,895 tons to zero and from Slovakia increased from 2,204 tons to 2,621 tons.  The largest suppliers to the Hungarian market this year included Germany which provided 4,393 tons in January to February and the Netherlands which supplied 3,232 tons. 

Ukrainian methanol deliveries March 2023

In addition to buying methanol from Poland Ukrainian gas producer Ukrgasdobycha, received 2,000 tons of methanol in April from the Norwegian company Equinor. 

Earlier this year Ukrgasdobycha received 6,000 tons of methanol from USAID.  The company plans to increase gas production by 1 billion cubic metres this year in order to completely abandon the purchase of gas abroad.

Since the beginning of the war, Ukrgazvydobuvannya has switched to the purchase of methanol from European suppliers. Assistance from USAID will create an additional reserve of strategic reserves and

Azoty Pulawy-caprolactam & melamine shutdowns

Production of base chemicals in Poland was largely down in the first quarter as raw material costs affected profitability levels.  Grupa Azoty claims that the EU's climate policy has upset the supply-demand balance on the European chemical market driving down production in numerous sectors. 

Natural gas in the EU is currently significantly more expensive than in the Middle East or the US.  In February this year, BASF announced the liquidation of production installations in Ludwigshafen, significantly reducing the production of ammonia and liquidating the production of caprolactam.

Indicative of the impact of natural gas prices on production costs and trade, Polish imports of urea increased from 545,400 tons in 2021 to 1.009 million tons in 2022.  Costs increased from €187.0 million against €713.5 million in 2022 with prices rising from €343 per ton to €707.  The largest sources of imports in 2022 came from Oman, Russia and Algeria.

Grupa Azoty production April 2023

Grupa Azoty produced 43.6% less nitrogen fertilisers in April 2023 than in April 2022, whilst Grupa Azoty Pulawy reduced production by 52.3%.

Urea production takes place at the Pulawy and Police plants in the Azoty group, and production for both plants dropped from 143,000 tons to 48,000 tons. 

Oxo alcohol production at Kedzierzyn dropped from 4,000 tons in April 2023 to 2,000 tons whilst polyamide production at Tarnow dropped from 15,000 tons to 10,000 tons.  On 9 March Grupa Azoty Pulawy decided to suspend the production of caprolactam and the operation of the Melamine III unit from 10 March until further notice.  Production on the remaining installations (Melamine I and Melamine II) was suspended in the summer of 2022.

Slovakia new gas import routes

Slovakia wants to create a new corridor for natural gas imports to Europe to provide alternatives to Russian supplies via the Yamal pipeline.   In cooperation with countries such as Romania and Bulgaria with the aim of creating a new corridor from Azerbaijan to Central and East Europe. 

New markets for Russian naphtha and hydrocarbon exports to China

The EU embargo on oil and oil products has forced Russia to seek out alternative destinations for naphtha sales.  Deliveries to Brazil, Tunisia and commercial centres in the Middle East are reported to have risen and traders expect this trend to continue.  Singapore tripled imports of Russian naphtha in the first quarter of 2023, receiving 741,000 tons for this period against 261,000 tons in the fourth quarter last year.  Singapore re-exports naphtha to South Korea, China, Taiwan and Japan.  Singapore is not a party to the EU embargo on the supply of petroleum products from Russia, but the country's authorities urge companies to exercise caution in working with Russian oil and oil products.

Regarding hydrocarbon exports to China, Russian crude shipments totalled €13.7 billion in the first quarter this year versus $12.7 billion in the same period in 2022.  Due to lower prices China’s imports by volume increased by 32% to 25.2 million tons.  Russia’s share of Chinese crude imports increased marginally this year, rising from 15.2% in 2022 to 17.0% in 2023. 

Prices of China’s crude imports from Russia averaged $541.7 per ton which was down from $662.0 per ton in the first quarter in 2022.  China increased imports of Russian gas by pipeline in the first quarter by 2.2 times, to $1.76 billion. LNG supplies increased by 67.7% to 1.62 million tons.  Overall oil and gas exports accounted for 56% of total export shipments to China in the period January to March 2023.

Logistics for Russian chemical companies

Russian chemical companies faced a number of new logistical problems in the first quarter in 2023 including the closure of the ports in the Azov basin partly due to the war in Ukraine and partly due to a decrease in the availability of vehicles for transportation.  Tariffs also increased in addition to an increase in the number of customs inspections of imported goods, whilst also facing an increase in restrictions on the shipment of dangerous goods through the Far East.

Despite new challenges, the number of container trains in the direction of the Far East was increased in the first quarter.  Moreover, preferential tariffs were allocated for the transportation of containers and the development of services for export through St. Petersburg. 

One of the main problems for shipments through the Far East is still the high congestion of railways and port infrastructure.  Chemical companies complain about the inability to predict the timing of deliveries in this way of both products sent for export and imported goods.  Moreover, in view of the rising number of sabotage attacks on Russian railways security has become a new concern particularly considering the lack of protection.

Russian base chemical and fertiliser production Q1 2023

The price index for Russian chemicals and chemical products showed a 17% fall in the first quarter this year compared to the first quarter of 2022.  Prices for rubber and plastic products were less affected and even rose very slightly by 0.2%.  Overall, the price index for manufacturing industries decreased by 4% in the first quarter.

Regarding base chemical production, Russian ammonia production totalled 4.4 million tons in January to March 2023 against 4.9 million tons in the same period in 2022 whilst caustic soda dropped from 327,000 tons to 299,000 tons. 

Potash fertiliser production in Russia dropped in the first quarter from 2.437 million tons last year to 1.684 million tons in the same period in 2022, whilst the production of nitrogen fertilisers rose from 3.056 tons to 3.196 million tons in the same period in 2023.  In the area of plant protection agents, the production of insecticides amounted to 2,200 tons which was 36% up in January last year, fungicide production increased by 31.4% to 4,100 tons and herbicides increased by 31,200 tons to 11,200 tons. 

Russian petrochemical production Jan-Mar 2023

Russian ethylene production rose slightly in January to March 2023 to 1.178 million tons against 1.162 million tons in the first quarter in 2022.  Propylene production dropped from 769,400 tons to 739,100 tons and benzene fell from 361,000 tons to 337,000 tons.  

Russian butanol production rose from 62,500 tons in January to March last year to 73,000 tons in January to March 2023. Butanols was one of the few product areas which saw domestic growth in 2022.  Of all the organic chemicals sanctions have had the greatest impact on methanol with production dropping 1.290 million tons in the first three months in 2022 to 953,800 tons in the same period this year.  All producers reported declines in the first quarter. 

Of the Russian methanol producers Shchekinoazot reduced production from 390,788 tons to 321,284 tons whilst Metafrax reduced production from 323,823 tons to 280,100 tons, and Gazprom Methanol reduced production to 193,770 tons from 228,260 tons. 

Russian rubber & polymer production Jan-Mar 2023

Russian production of synthetic rubbers in primary forms amounted to 357,000 tons in January to March 2023 compared to 431,000 tons in January to March 2022.  Those rubber producers affected by sanctions, are trying to diversify their supplies so as not to depend so much on the domestic tyre market.  The decline in tyre manufacturing of 21.4% in 2022 provided the main factor behind the reduction in synthetic rubber production, although other areas of consumption helped to offset the decline.  The domestic industry produced 10.0 million tyres in the first quarter of 2023, 37% less than in 2022. 

The production of plastics totalled 2.660 million tons in the first quarter this year against 2.772 million tons in the same period last year.  The production of polyethylene rose from 915,00 tons to 936,000 tons in the first quarter in 2023.  Polystyrene production amounted to 142,200 tons in January to March against 149,300 tons in the same period in 2022.  Although lower than in 2022 the market is showing resistance.  The production of finished polymer products related to construction is still growing at a high rate which is attributed to an increase in the volume of housing commissioning.  

The production of synthetic fibres decreased in January to March 2023 to 46,000 tons compared to 50,100 tons in the same period in January to March 2022.  The production of polymers in Russia in January to March amounted to 1.684 million tons versus 2.437 million tons in the same period last year.  Of the bulk polymers PVC declined from 275,000 tons in the first quarter in 2022 to 228,500 tons.

Amur Gas Chemical Complex-higher costs

The Amur Gas Chemical Complex is now estimated by SIBUR to cost significantly more than the original plan after the exit of Western partners, although specific details have not been given.  The target start-up of 2026 is provisional and may need delaying further depending on the reconfiguration of technologies. 

The launch of the Amur Gas Chemical Complex was originally scheduled for 2024-25 but sanctions have meant that technology suppliers such as Linde and Tecnimont have had to be replaced.  Construction began in 2020 and its original cost was estimated at $10 billion. 

The Amur Gas Chemical Complex and the Amur Gas Processing Plant (GPP) are the two largest projects within the framework of a single gas chemical cluster for gas processing, being built near Svobodny in the Amur Region.  

Nizhnekamskneftekhim EP-600 olefin complex to be completed in 2024

Construction of Nizhnekamskneftekhim’s EP-600 olefin complex is currently scheduled to be completed in the second half of 2024.  Besides the construction of ethylene and propylene the complex also includes plants for ethylbenzene and styrene with respective capacities of 400,000 tpa and 350,000 tpa. 

SIBUR planning propylene expansion at Tobolsk

SIBUR plans to build an additional plant for propylene production at Tobolsk in the Tyumen Region at the ZapSibNeftekhim site.  The project involves the construction of a propane dehydrogenation unit and the production of polypropylene, making use of the existing energy and raw material infrastructure of the Tobolsk site.  ZapSibNeftekhim is the largest petrochemical complex in Russia, with a total capacity of 2.5 million tpa of base polymers (1.5 million tpa of polyethylene and 1 million tpa of polypropylene). The company is located 10 km east of Tobolsk.

A government incentive for building petrochemical plants means that SIBUR will receive a reverse excise tax on raw materials from the propane dehydrogenation unit at Tobolsk.  In order for a company to obtain the right to a reverse excise tax on petrochemical raw materials, according to the requirements of the law, it must invest at least 110 billion roubles in the modernisation of production in Tobolsk.

Gazprom Neft-polyolefin feasibility study at Omsk refinery

Gazprom Neft intends to complete a feasibility study on the creation of polyethylene and polypropylene production facilities at the Omsk oil refinery site by the end of the year.  The company is also considering the production of polyols, isocyanates and other products at the Omsk refinery.  Ideas for petrochemical investments have been put forward before for Omsk and the aim now is to try and decide whether to proceed with investment plans.  Particularly the question of licenses poses the most difficult challenge to the project feasibility study and if resolved this year would allow Gazprom Neft to proceed to the design stage. 

Russian ethylene production, Jan-Mar 2023

Russian ethylene production totalled 1.178 million tons in the first quarter in 2023 against 1.162 million tons in January to March 2022. 

Regarding individual producers ZapSibNeftekhim at Tobolsk produced 393,000 tons, up from 375,800 tons from January to March 2022.  Nizhnekamskneftekhim produced 163,200 tons of ethylene in January to March against 158,500 tons, whilst Kazanorgsintez increased production from 171,800 tons to 172,600 tons.  Providing Kazanorgsintez with ethane is one of the key issues for increasing production volumes, either from the main source from the Orenburg Gas Processing Plant in the south Urals or the Tatar source from the Minnibayevo Gas Processing Plant.  At the end of March this year an accident occurred on the pipeline linking the Minnibayevo plant with Kazanorgsintez.  This was attributed to the poor condition of the pipeline. 

To operate at full capacity ethane requirements for Kazanorgsintez comprise about 780,000 tpa.  In 2022, about 580,000 tons of ethane fraction was received, whilst in 2023 550,000 tons has been set as the target, taking into account the condition of both pipelines linking Orenburg and Minnibayevo to Kazanorgsintez.