MOSCOW (MRC) -- Russian producers increased production of high density polyethylene (HDPE) in 2015 by 11% year on year. However, there were major structural changes in the material assortment, which will also have consequences in 2016, according to the Annual Report "Polyethylene in Russia - 2016".
Russian producers managed to raise their HDPE production to 904,000 tonnes last year. Stavrolen, which resumed production in April 2015 after a long forced shutdown in February 2014, accounted for the main increase in the total output. In addition, the HDPE assortment was changed significantly, and this factor will have an impact on the performance of 2016.
The existing HDPE production capacities are excessive, and, given the expectations of a further fall in demand, issues of the production optimization and imports substitution by Russian producers are becoming more relevant.
Kazanorgsintez, Russia's largest polyethylene (PE) producer, increased its production of black pipe grade HDPE (PE 100 grade) by 30% last year. Given the installation of new equipment, the plant's total production capacity of this PE grade reached 240,000 tonnes per year. At the same time, the company will fully refuse from the production of natural grade HDPE - PE2NT11-285D grade starting from February 2016. This PE grade was used both in pipes and films production, and it was particularly in demand in summer.
Stavrolen resumed PE production in early April 2015. At the same time, the plant refused from HDPE production (PE 80 grade). Stavrolen's production capacity allowed to produce about 80,000 tonnes of coloured pipe grade PE. All the plant's efforts are focused on the film grade and blow moulding HDPE.
Nizhnekamskneftekhim significantly increased the share of linear low density polyethylene (LLDPE) in its total output last year, overall production exceeded 46,000 tonnes. This process (reduction in HDPE production in favour of LLDPE) will continue in 2016. At the same time, the plant has repeatedly stated plans to increase its LLDPE production to 100,000 tonnes per year. This factor will be felt more acutely in summer - a period of strong seasonal demand and scheduled outages for maintenance at some plants.
Gazprom neftekhim Salavat also successfully occupied its niche in the Russian market. The Bashkir plant has focused on the production of pipe grade HDPE. Besides, jointly with a compounds manufacturer, it started production of PE compounds for coating of large diameter steel pipes, thereby reducing the dependence on imports of this PE grade. Although the plant will not leave its attempts to gain a foothold in the segment of film grade and blow moulding HDPE.
MRC