Russia Petrochemicals Report Q1 2016 - New Market Report

The Russian petrochemicals industry managed to report strong growth in H115 in spite of worsening economic fundamentals due to its ability to defend margins on lower product prices and increase its domestic market share. The fall in the cost of locally available naphtha feedstock as well as the slump in the value of the rouble helped boost the competitiveness of Russian output, even as end markets went into recession. However, 2016 is set to be more challenging with producers expecting a decline in sales and production.

Russian producers reported double digit growth across a variety of petrochemicals segments, with plastics and rubber witnessing notably strong growth. The trend has fuelled domestic self-sufficiency, even as petrochemicals exports to Europe have slumped in the face of trade sanctions and the Ukraine crisis as well as the domestic economic recession.

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However, Russia's petrochemicals sector also suffers from structural inefficiencies which have deterred investment, particularly in the country's oriented production. Challenges include the country's manufacturing sector, which is not competitive without the presence of government incentives. Importantly, we do not expect such hurdles to be cleared in the short-to-medium term, resulting in a subdued outlook for the country's export-led industries.

Key Developments and BMI Forecasts

In 2016, the construction sector is due to contract by 1.2%, while the automotive industry will see output decline 3.1% following heavy slumps in 2015. With these sectors playing a critical role in the petrochemicals markets, they will impact heavily on domestic petrochemicals production across a wide variety of segments.

Leading petrochemicals producer Sibur has responded to the increasing adverse economic trends and mounting debt with a reduction in capital spending and the lengthening of project timescales, but has secured Chinese interest in investment.

The Russia Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's Russia Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Russian petrochemicals industry.

Key Benefits

* Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Russian petrochemicals market.
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