Russia Petrochemicals Report Q3 2016 - New Market Research Report

From: Fast Market Research, Inc.
Published: Wed Jun 15 2016

Forthcoming investment projects focusing on import substitution should address the supply/demand imbalance and move Russia to self-sufficiency; in some segments Russia will become a net exporter. With domestic market growth slower than capacity growth coupled with a weak rouble and low feedstock costs, Russia is likely to lead to far higher levels of exports than previously expected.

The Russian petrochemicals industry is outperforming the overall economy with capacity utilisation rising amid economic conditions that are favourable to the sector. In the January-April period, polypropylene (PP) production grew 7.0% y-o-y and polyethylene terephthalate (PET) output rose 4.6%. Production was boosted by an increase in capacity, stronger domestic demand and a weak rouble that protected the economy from imports. This follows a stronger performance in 2015 when basic chemicals output rose 6.3% and ethylene production grew 16.4%.

However, growth hides the sector's 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.

Full Report Details at

Domestic market conditions remain difficult, although they favour local production over imports. We have downgraded our real GDP growth forecast for 2016 from -0.7% to -1.2%, for 2017 from 2.3% to 1.5% y-o-y. We have raised out construction forecast from -3.1% to -1.8%, signifying a more shallow recession in the sector in 2016 which should benefit local producers of PVC products and polymer pipe. Meanwhile, the autos sector is set for 0.8% growth, impacting positively on engineering plastics - particularly in the PP segment - and synthetic rubbers.

In 2020, we envisage ethylene capacities totalling 9.2mn tonnes per annum (tpa). However, some segments will see little or no movement, notably styrenics and some intermediates such as ethylene oxide/ethylene glycol and ethylbenzene. There is plenty of potential naphtha and ethane feedstock availability from the expansion of refineries and the opportunities presented by a growing gas sector.

Polymer capacity will be boosted in 2016 with Sibur's expansion of its Tomskneftekhim (TNKh) raising PP by 10,000tpa and HDPE by 40,000tpa by 2016 and Gazprom planning a 1mn tpa naphtha cracker and downstream units at Salavat and Rosneft with capacities of 1.4mn tpa ethylene, more than 600,000tpa propylene, 230,000tpa benzene and 200,000tpa butadiene. This will be followed in 2017 with NKNKh's plans to open a 400,000 tonnes per annum (tpa) PP unit as well as facilities producing 600,000tpa of polyethylene (PE).

About Fast Market Research

Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget.

For more information about these or related research reports, please visit our website at or call us at 1.800.844.8156 (1.413.485.7001 Int'l)

You may also be interested in these related reports:

- Israel Petrochemicals Report Q3 2016
- South Africa Petrochemicals Report Q3 2016
- Hungary Petrochemicals Report Q3 2016
- Egypt Petrochemicals Report Q3 2016
- Romania Petrochemicals Report Q3 2016

Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
Contact Email:
Contact Phone: 1-413-485-7001

Visit website »