2013-12-25 23:41:09 - New Energy research report from Business Monitor International is now available from Fast Market Research
Russian petrochemicals capacity expansion over the medium term will be stimulated by expansion of non-oil industrial sectors and domestic market growth. BMI believes that a structural change in the economy towards domestic demand-led growth should benefit the petrochemicals industry, and domestically driven growth should ensure expansion does not lead to an imbalance between supply and demand, although in some segments there is the prospect of exports.
According to the Russian Federal State Statistics Service, in H113, Russian production of chemicals rose by 3.3% y-o-y, while rubber and plastics grew 7.8%. This performance placed the chemicals and petrochemicals industries well ahead of overall manufacturing performance which saw zero growth over the period and total industrial growth of just 0.1% y-o-y. In the
first 10 months of 2013, plastic in primary forms was up 14% y-o-y to 5mn tonnes while synthetic rubber grew 5.1% to 1.2mn tonnes. Boosting polymers, particularly in the polyethylene segment, Russian per capita consumer spending is forecast to increase by 59.0% between 2013 and 2017, compared with a regional growth average of 42.0%.
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Following planned capacity expansion in 2014, Russia will be transformed from a net polypropylene (PP) importer to a net exporter, and polyethylene terephthalate (PET) and polyethylene (PE) capacities will continue to keep pace with growing demand. Further major developments are planned in polymers over the forecast period, including Sibur's expansion of its Tomskneftekhim (TNKh) subsidiary through a debottlenecking programme that will raise PP by 10,000 tonnes per annum (tpa) and HDPE by 40,000tpa by 2016. Gazprom is building a 1mn tpa naphtha cracker and downstream units at Salavat, and Rosneft is also planning a naphtha cracker with capacities of 1.4mn tpa ethylene, more than 600,000tpa propylene, 230,000tpa benzene and 200,000tpa butadiene. The complex, which could come on stream by 2016, will be engaged in polymers production and will produce a range of other petrochemicals products.
BMI's key views for the petrochemicals sector are:
* At 6kg per capita, PP consumption in Russia is half China's 12kg, Eastern Europe's 14kg and Western Europe's 14kg. BMI expects that growth in per capita consumption could return Russia to being a net importer of PP by 2018, on the back of potentially double-digit demand growth. Russia produced around 453,000 tonnes of PET in 2012, importing 185,000 tonnes, and the national market has substantial growth potential. Russian per capita consumption of food-grade PET is 4.1 kg, compared with 9.5 kg in the US, according to Sibur.
* Over the next five years, PE will lead polymer capacity growth, accounting for a total of 69% of the increase with LLDPE accounting for 25%, LDPE 24% and HDPE 20%. PP will contribute a further 17%, PET 13%, and PVC 1%.
* In 2018, we envisage ethylene capacities totalling 7.7mn tpa. However, some segments will see little or no movement, notably styrenics and some intermediates such as EO/EG 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.
* Russia has a petrochemicals Risk/Reward Rating of 65.9 points, down 0.3 points since the previous quarter but keeping its seventh place, 0.9 points behind Spain and 6.5 points ahead of Poland. Russia's relatively strong position in our petrochemicals ratings for Europe has been recovering as its risks decline and capacity increases.
Partial Table of Contents:
BMI Industry View
- Business Environment
- Table: Russia Petrochemicals Forecasts, 2010-2018
- Macroeconomic Forecasts
Industry Risk/Reward Ratings
- Europe Petrochemicals Risk Reward Ratings
- Table: European Petrochemicals Risk/Reward Ratings (Scores Out Of 100)
- Russia Petrochemicals Risk/Reward Ratings
- Table: Russia's Cracker Capacity Data - Historical Data & Forecasts, 2010-2017, ('000 tpa)
Industry Trends And Developments
- Olefins And Aromatics
- Polymers And Intermediates
- Table: Financial Results
- Nizhnekamskneftekhim (NKNK)
- Table: Financial Results (RUBmn)
- Sibur Holding
- Table: Financial highlights (RUBmn, Unless Stated Otherwise)
- Europe Overview
- Declining Capacities
- Table: European Cracker Capacities, 2013
Global Industry Overview
- A Stable 2013, Leading to Growth in 2014?
- Table: Top 10 ethylene producers, 2013
- Long-term growth
- Shale: The Future of Feedstock?
- Threats to growth
- Global Oil Products Price Outlook
- Crude Price Forecasts
- Table: BMI's Oil Price Forecasts, Average Price (US$/bbl)
- Variance Across Product Markets
- Narrower US Market Crude-Product Spreads
- Weak Demand Persists
- Risks To Outlook
- Table: BMI's Refined Products Forecasts, US$/bbl
- Supply: Supported By Global Refining Capacity
- Naphtha: US Gas Hits Demand
- Gasoline And Gasoil/Diesel: Subsidies & Fuel Efficiency Cap Upward Movement
- Jet Fuel: Limited Upward Movement
- Table: Total Air Freight And Passenger Volumes
- Bunker Fuels: Sulphur Control To Hit Rotterdam Hardest
- Table: Russia's Population By Age Group, 1990-2020 ('000)
- Table: Russia's Population By Age Group, 1990-2020 (% of total)
- Table: Russia's Key Population Ratios, 1990-2020
- Table: Russia's Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk Reward Rating Methodology
- Table: Petrochemicals Risk Reward Rating Indicators
Full Table of Contents is available at:
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