The largest producers of polyethylene in Russia

Traditionally, polyethylene is a plastic and is included in the category of ethylene polymers, from which, in particular, large diameter tubes and pipeline parts, cable products, packaging bags, shampoo bottles, etc. are made. This material is characterized by the ability to take a given shape under the influence of external influences (usually temperature and pressure) and retain it after the external influence is eliminated.

According to experts, the global polyethylene production market annually shows an average growth of 2%, and by the end of 2023 amounted to approximately 113 million tons. Over the past 10 years, this market has grown by about 22%.

Graph. 1. Global polyethylene production in 2015-2023, mln tons.

Source: statista.com

The key producers of polyethylene in the world are the countries of the Asia-Pacific region and North America, which account for almost 60% of global polymer production.

Graph. 2. The largest polyethylene producing countries by the end of 2023, %

Source: industryarc.com

In recent years, Russia has seen an increase in the production of ethylene polymers in primary forms. Polyethylene production in Russia increased from 26.6% to 33.02% of the total plastic production from 2018 to 2023. In 2023, 3,536 thousand tons of ethylene polymers in primary forms were produced in Russia, which is +1.5% more than the production volume of the previous year. The average annual increase in the production (CAGR) of ethylene polymers in primary forms for the period 2017-2023 amounted to 8.6%.

Graph. 3. Dynamics of ethylene polymer production in primary forms, thousand tons.

Source: Rosstat

The leading federal district of the Russian Federation in the production of ethylene polymers in primary forms is the Volga Federal District (46.8%), in second place is the Ural Federal District (35.7%).

Graph 4. The largest polyethylene producing regions in Russia by the end of 2023, %

Source: Rosstat

In 2022 and 2023, in response to the growing demand, Russian polymer manufacturers focused on the development of the domestic plastics processing market, export shipments in the vast majority of segments began to steadily decrease. Due to the withdrawal of Russian manufacturers from Europe, foreign sales markets have narrowed. However, the work on export diversification continues.

The export of polyethylene has been steadily declining for two years in parallel with the growth of domestic consumption. In 2023, it reached 1 million 106 thousand tons (in 2021 it was 1 million 978 thousand tons).

Chart 1 – Dynamics of polyethylene exports, thousand tons

Source: Rosstat data

In 2023, there was a complete lack of exports to EU countries. China has been and remains the main market. However, the volume of exports in absolute terms has almost halved. The second consumer of Russian polyethylene is Turkey. And this direction, unlike China, is growing. In two years, the volume of annual exports to Turkey increased 1.5 times, from 270 thousand tons in 2021 to 428 thousand tons in 2023. These two countries accounted for up to 90% of polyethylene supplies from the Russian Federation last year. Vietnam became the third major export market. Relative to 2021, supplies there increased 2.5 times, but in absolute terms, they are still small - 63 thousand tons in 2023.

Domestic producers are replacing supplies of imported polyethylene grades that have fallen due to sanctions. The process began in 2022 and was developed in 2023. As a result, we are witnessing a systematic reduction in the share of imports in the Russian PE processing market. It has decreased from 27% to 16%.

Imports of polyethylene and its copolymers to Russia from non-CIS countries, with the exception of the EAEU countries, continued to decline in 2023. According to Ecoplastics, imports of uncompounded polyethylene from these countries have decreased by 27.4% since 2021 to 283 thousand tons.

Graph. 5. Import of polyethylene from far abroad by the end of 2023, million tons.

Source: Ecoplastics data

At the same time, imports of low-density polyethylene (LDPE) from non-CIS countries fell by 69.1% to 12 thousand tons in 2021, and imports of linear polyethylene (LDPE) decreased by 40% in two years to 91 thousand tons in 2023. Imports of high-density polyethylene (HDPE) of pipe grades in 2023 increased by 47.6% and amounted to 223 thousand tons, mainly due to an increase in the share of polyethylene producers from China and Thailand in the Russian market.

The number of importers has also decreased. South Korea remains the largest importer (especially when it comes to specific products such as RC grade polyethylene or crosslinked polyethylene). Although import substitution is taking place for the same reasons. In 2022, there was a powerful jump in the supply of PE from South Korea (by 30%), but in 2023 supplies returned almost to the level of 2021 (99 thousand tons in 2023, and 93 thousand tons in 2021). China became the second largest supplier in 2023. It was his companies that managed to take advantage of the departure of European suppliers. The country's share in the Russian market has grown from 4% to 20% in 2 years. And in absolute terms, the increase in imports from China was almost fourfold - from 24 (in 2021) to 91 thousand tons (in 2023). Azerbaijan increased its supplies by one and a half times (to 76.3 thousand tons), and its share increased to 17%.

In contrast to the reduction in imports of polyethylene from non-CIS countries, PE supplies from the former CIS countries show significant growth. According to statistics obtained by Ecoplastics, imports of PE from Belarus in 2023 increased by 55.6% and reached 84 thousand tons, imports of PE from Azerbaijan jumped 2.6 times to 76 thousand tons, from Uzbekistan increased by 41.9% to 44 thousand tons.

Graph. 6. Polyethylene imports from the EAEU countries by the end of 2023, million tons.

Source: Ecoplastics data

It took less than a year for polymer manufacturers to change suppliers of functional additives, catalysts and other "special chemicals" necessary for the implementation of production processes. In 2023, there was a reorientation to other foreign consumers, and the search for new sales markets to replace the European one continues. The industry is developing, including through the creation of joint ventures on the territory of the former USSR countries. The polymer industry has withstood the tests of sanctions, forecasts and fears of a systemic drop in demand for polymers have not been justified.

In March 2024, Khimprom published a rating of the 15 largest manufacturers of base polymers in Russia by the end of 2023.

The three Russian leaders include the following companies:

• for the production of low–density polyethylene - Tomskneftekhim, Kazanorgsintez, Ufaorgsintez;
• for the production of high–density polyethylene - ZapSibNeftekhim, Kazanorgsintez, Stavrolen;
• for the production of polypropylene – ZapSibNeftekhim, Nizhnekamskneftekhim, Ufaorgsintez;
• for the production of polystyrene and high–impact polystyrene - Nizhnekamskneftekhim, Gazprom Neftekhim Salavat, Penoplex;
• for the production of polyvinyl chloride suspension – Bashkir Soda Company, RusVinil, Sayanskkhimplast;
• for the production of polyethylene terephthalate – "EcoPET", "Polyef", "Plant of new polymers Senezh"

Polymer consumption in pipeline systems in Russia has increased by 50% over the past four years. At the same time, this growth amounted to 9% in 2023. The Russian market of polyethylene pipes in 2023 exceeded the mark of 600 thousand tons. It is predicted that by the end of 2024 more than 700 thousand tons will be produced. At the same time, state programs, including gasification, renewal of housing and communal services networks, as well as individual industrial projects continue to be the main drivers of production growth.

Graph 7. Dynamics of production of PE pipes for external engineering networks

Source: Polyplastic company data

According to POLYPLASTIC Group, the main market driver remains the water supply pipe segment, non-pressure pipes are growing less. At the same time, the segment of pipes for agriculture is growing synchronously with the entire market. The production of pipes for the oil and gas segment is growing with good dynamics, but against the background of the total market volume, they are still not noticeable.

At the same time, the share of falsified polyethylene pressure pipes in the Russian market ranges from 15 to 20%, whereas in Belarus it is less than 0.1%, and in Kazakhstan it is about 90%. The share of falsification depends on the presence or absence of mandatory safety requirements, state supervision, as well as liability measures at the stage of pre-market control.

Gazprom purchased 120 thousand tons of polyethylene pipes in 2023, and in 2024 it is planned to increase purchases by 20% to 140 thousand tons in order to fulfill the instructions of the president of the regional gasification program.

The production of polyethylene pipes in Russia may exceed 1 million tons by 2030, including due to SIBUR's development of new pipe grades of polymers. For the first time in Russia, ZapSibNeftekhim (SIBUR's Tobolsk company) began producing non-ferrous high-density polyethylene pipe grades: HD 03505 RC blue and HD 03505 RC orange. They will be used in the construction of pipelines for water and gas supply systems. Back in 2021, according to the Association of Pipeline System Manufacturers, the volume of consumption of blue and orange RC brands in Russia amounted to 4.5 thousand tons. Now the annual demand of Russian manufacturers for these brands is estimated at 10 thousand tons. With the advent of a new product and the opportunities it will give processors, the consumption of RC brands may increase to 30 thousand tons per year. The start of mass production of non-ferrous polyethylene is expected in 2024.

In addition, the company's specialists are working on polyethylene brands that will complement the existing offers of materials for casting caps and lids, as well as for blowing capacious containers. Special grades of metallocene polyethylene and high-flow linear low-density polyethylene are being created.

It should be noted that in February 2024, the Ministry of Industry and Trade presented a List of critical industrial products in the chemical industry of the Russian Federation for 2024 and the planning period for 2025 and 2026, which was previously included in the import substitution plan. The order of the Ministry of Industry and Trade No. 207 "On approval of the list of critical light industry products of the Russian Federation" was published on January 24, 2024.

In general, in 2023, there was a recovery in the production of base polymers. PE and PP have actually reached the level of 2021. Manufacturers of base polymers in 2023 preferred the domestic market (especially with regard to PE, PVC, PS). This is noticeable both in the abundance of activities for processors, and in the set of programs that stimulate processing, and in the import substitution of specific brands, and directly in consumption figures. Accordingly, all these measures have affected the growth of processing. As a result, a significant increase in the consumption of base polymers was recorded in the domestic market. As a result of this work, and in the context of growing supplies of Russian polymers to the domestic market, there is a trend towards a reduction in the share of imports. It is fixed for almost all base polymers. In imports, along with the departure of European suppliers, the number of importing countries has decreased, sometimes by 2-3 times compared to 2021. At the same time, individual importing countries, in the absence of European competitors, were able to significantly increase their shares in Russian market segments. New countries have emerged as import leaders. Export markets have narrowed due to the withdrawal of Russian manufacturers from Europe, and the number of buyer countries has decreased. Efforts to diversify sales markets are continuing, and there are already successes in relation to individual countries. Of the export successes, Turkey is worth noting, it has become one of the largest markets for Russian base polymers in the segments of PE, PP, PS, PC. Vietnam (PE and PP) has become an interesting growing market. Sales also increased in the countries of the former USSR: in Kazakhstan and Azerbaijan - PVC, in Uzbekistan - PP, PS, PC.