Russian automotive production in 2023 increases 16% to 720,000 units

Production of all types of motor vehicles increased 16% in Russia in 2023 to 720,000 units, Russian Deputy Prime Minister and Head of the Ministry of Industry and Trade Denis Manturov said, as per Interfax.

"Last year production increased 16%; over 720,000 cars from different segments rolled off assembly lines in our country. In total, over 1.3 million cars of all types were sold on the domestic market," Manturov said at a meeting of the Prime Minister with deputy PMs on Monday.

Programs to stimulate demand for domestic cars have become an important aspect of the revival of the Russian automobile industry, he said. "Last year, the state allocated about 16 billion rubles for preferential leasing and car lending mechanisms. This made it possible to ensure the sale of 62,000 cars. The government has allocated funds to continue the programs this year," Manturov said.

As reported, there are 17.3 billion rubles in the federal budget for preferential car loan financing, with 9 billion rubles allocated for preferential leasing.

Manturov noted at the meeting on Monday that the all-encompassing task for all types of automotive equipment in Russia remains scaling the production of automotive components. "A special program of the Industrial Development Fund (IDF) has been aimed at this since 2022. Under it, we have already supported 31 projects worth 53 billion rubles. At the end of last year, the IDF received about 55 billion additional rubles. A significant part of these funds will also be directed to the localization of components," the Deputy Prime Minister said.

The priority for Russia here is bring the production of the passenger car and light commercial vehicle segments completely on-shore, he said. "Solving this strategic task will make it possible to form new production chains protected from sanctions. This would create hundreds of small and medium-sized cooperation companies which would replace global suppliers," Manturov said.

A similar approach, he said, would also be applied in other segments of the automotive industry where there is a higher share of government procurement. "First of all, this applies to updating the vehicle fleets of the healthcare and education systems. Last year, the government supplied the country's regions with more than 3,000 school buses, 1,200 ambulances and 200 mobile medical complexes," Manturov said.

We remind, Lukoil's NORSI oil refinery in Nizhny Novgorod may halve high-octane gasoline output after an emergency stoppage at one of two plant's catalytic cracking unit, industry sources said on Monday. The NORSI oil refinery, one of the largest in Russia, halted a unit after an incident, oil company Lukoil said on Friday without providing further details.

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More than 82 companies, businesses and social organizations – including AkzoNobel – are involved in a major Dutch research program focused on developing new technologies that will help solve some of today’s societal challenges, said the company.

Seven broad consortia have been established as part of the government-funded “Perspectief” program, with AkzoNobel set to play a leading role in the SusInkCoat project, which will explore how to make inks and coatings more sustainable.

The company will work together with private partners and other societal stakeholders to develop new materials, processes and applications to improve the durability, functionality and recyclability of coatings, thin films and inks. The program, which will run for the next five years, is backed by the Ministry of Economic Affairs and Climate Policy and the Dutch Research Council (NWO).

“Our discussions about collaborating with our SusInkCoat partners have been very positive,” says AkzoNobel’s R&D Director of Scientific Academic Programs, Andre van Linden, who is also the co-lead of SusInkCoat. “We’re all facing the same societal challenges – how to become more circular – and we’re looking for the same solutions in different application areas. But we’ve never done that together for this specific research topic, so we need an ecosystem to help us solve these challenges.

Van Linden adds that the program – one of many R&D projects the company is involved with – will also support AkzoNobel’s ambition to achieve 50% less carbon emissions in its own operations – and across the value chain – by 2030.

“We want to make the recyclability of materials - such as furniture, building materials and steel constructions - easier by introducing functionalities like self-healing, higher durability and triggered release,” he continues. “The more you can leave the materials in their original state, the more sustainably you can operate.”

AkzoNobel will be collaborating with Canon, Evonik, GFB, PTG and RUG Ventures, who together possess extensive knowledge of market demands, supply chains and production processes. All the SusInkCoat partners will also work with academic researchers at several Dutch universities in an effort to identify promising developments that can be commercialized, used for education purposes or for outreach to the public.

Research being conducted by the other six consortia includes investigating methods to make tastier plant-based food; flat optics for more sustainable hi-tech equipment; and cheaper and more accessible medical imaging technology.

We remind, Revolutionary software co-developed by AkzoNobel’s Powder Coatings business and coatingAI is using artificial intelligence to help customers improve the application process and reduce their carbon footprint. The industry-first technology, called Flightpath, optimizes equipment settings to reduce defects and overspray and improve powder consumption – helping to reduce costs, avoid rework and save time and energy.

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BASF, a leading chemical producer based in Germany, is set to reboot one of its naphtha-fed steam crackers at the Ludwigshafen complex, said Chemanalyst.

This move comes after the completion of essential maintenance work. It is predicted that flaring activities will be sustained until January 13 as part of the restart process.

Despite numerous inquiries, BASF has opted to keep details concerning the duration of the revamp or the specific products affected by these operational changes under wraps. The Ludwigshafen facility is home to two naphtha-fed steam crackers, with respective ethylene capacities of 420,000 metric tons per year and 240,000 metric tons per year.

The restart of the steam cracker is a significant move for BASF, marking the conclusion of a critical maintenance phase. The company's decision to reignite operations at this point could signal a positive shift in the market conditions or an anticipated increase in demand for their products. However, without additional information from BASF, the specific reasons behind this decision remain speculative.

In tandem with the steam cracker's restart, BASF has issued a warning about ongoing flaring activities at its Friesenheim Island premises, located near the Ludwigshafen complex. Due to technical factors, these flaring activities are expected to continue until the end of the week. Flaring is a common practice in the chemical industry, used to burn off excess gases during various production processes. While it can contribute to air pollution, it is often considered a necessary safety measure to prevent the build-up of potentially hazardous gases.

The Ludwigshafen complex is a cornerstone of BASF's operations. With the restart of the naphtha-fed steam cracker, the site will resume its role as a vital cog in the company's production network. However, the decision to withhold details about the impact of these operational adjustments on specific products suggests that there may be other factors at play – possibly including shifts in market demand or strategic considerations.

The ongoing flaring activities at Friesenheim Island, coupled with the restart of the steam cracker at Ludwigshafen, underscore the complexities involved in managing large-scale chemical production facilities. These operations must balance the need for safety and environmental considerations with the demands of production and market supply.

BASF's decision to restart its naphtha-fed steam cracker at the Ludwigshafen complex signals a return to normal operations after a period of necessary maintenance. While the company has been tight-lipped about the specifics of this operational shift, it is clear that they are making strategic adjustments in response to the evolving market conditions and production needs. As flaring activities continue at Friesenheim Island, the company remains vigilant about safety and technical considerations, highlighting the intricate balance required in the chemical manufacturing industry.

We remind, BASF, a global battery materials producer and battery recycler, and Stena Recycling, one of Europe's leading recycling companies, offering comprehensive solutions in recycling and circular services, have entered into a black mass purchase agreement. This agreement is part of a broader collaboration envisaged by BASF and Stena Recycling with the goal of setting up a battery recycling value chain for the European electric vehicle battery market.

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Saudi Eastern Petrochemical Company (SHARQ), a prominent petrochemical producer in Saudi Arabia, has implemented a reduction in the utilization of linear polyethylene (LDL) production at its Al-Jubail facility, said Chemanalyst.

This decision stems from a shortage of raw materials, resulting in a substantial decrease of approximately 50% in the overall LDL production. The extended closure of the cracker has been a key factor contributing to the shortage of raw materials, significantly impacting three LDL plants operated by SHARQ.

In addition to LDL production, SHARQ also manages a low-density polyethylene LDPE production line with an annual capacity of 400,400 tonnes. While this LDPE production line is also affected by the lower availability of raw materials, market sources suggest that the impact is comparatively less pronounced than in the LDL production sector. The repercussions of the reduced LDL production extend to delayed deliveries to the market, posing challenges for the timely supply of these critical petrochemical products.

A notable incident leading to this development was the unexpected halt of one LDL production line with a capacity of 5,000 tons per year in January 2023. The interruption was attributed to a technical breakdown, further exacerbating the challenges faced by SHARQ in maintaining optimal production levels. The company's efforts to address and resolve technical issues will play a crucial role in mitigating the impact on LDL production and ensuring the reliability of supply chains.

SHARQ, a joint venture between SABIC and Saudi Petrochemical Development Co (SPDC), represents a collaborative effort between Saudi and Japanese entities. The consortium of Japanese companies, led by Mitsubishi, forms the SPDC, reflecting the international partnerships that play a vital role in the operation and development of SHARQ's petrochemical facilities.

The reduction in LDL production at SHARQ's Al-Jubail facility underscores the complex challenges faced by the petrochemical industry, where disruptions in the supply chain and technical breakdowns can have cascading effects. The shortage of raw materials, particularly attributed to the prolonged closure of the cracker, highlights the vulnerability of petrochemical production to external factors.

As SHARQ grapples with these challenges, industry observers will closely monitor the company's efforts to address technical issues, restore production levels, and navigate the complexities of the petrochemical market. The delays in market deliveries resulting from the reduction in LDL production further emphasize the importance of maintaining a resilient and agile supply chain in the face of unexpected disruptions.

SHARQ's decision to reduce LDL production in Al-Jubail due to a shortage of raw materials highlights the intricate nature of the petrochemical industry. The collaboration between Saudi and Japanese entities in the form of SABIC and SPDC adds an international dimension to the challenges faced by SHARQ. The industry will keenly watch how the company addresses technical issues, restores production, and adapts its supply chain strategies to ensure the consistent delivery of petrochemical products to the market.

We remind, Saudi Eastern Petrochemical Company (SHARQ), a leading petrochemical producer in the country, is gearing up to recommence production at its No. 4 monoethylene glycol (MEG) line in Al-Jubail, Saudi Arabia, during the second half of January. This strategic move comes in the aftermath of scheduled maintenance that temporarily halted operations on the MEG line. The planned repairs, initiated in November, aimed to address low production margins and ensure the continued operational efficiency of the line with an annual MEG production capacity of 700 thousand tons.

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Over the course of 11 months in 2023, Russia has witnessed a noteworthy uptick in the production of plastics in primary forms, marking a 3.4% increase compared to the corresponding period in the previous year, said Chemanalyst.

This positive trajectory is primarily fueled by heightened production levels of polyethylene (PE) and formaldehyde resins, although the recent months have seen a somewhat less substantial increase in PE, standing at 1.8%. Nevertheless, the sheer volume of PE produced, surpassing other polymers, has contributed to an overall favorable trend in the broader plastics category.

The surge in the production of formaldehyde resins has been more pronounced, exhibiting a robust 9.6% increase over the 11-month period. Notably, this escalation in output began in September, with figures for the preceding eight months trailing behind the results recorded in the same period of the previous year.

On the flip side, the production of polyvinyl chloride (PVC) has shown signs of improvement. While the volume of PVC production at the end of nine months was 2022.6% lower than the figures from the previous year's six-month results, by the conclusion of the 11-month period, they essentially equalled the levels recorded in the corresponding period of the prior year.

In contrast, polyamides remain on the lower end of the spectrum, experiencing a substantial decline of 20.2% over the 11-month period compared to the same period in the previous year.

Earlier reports shed light on the production landscape of plastics in Russia for the initial nine months of 2023, showcasing a 2.1% increase. Simultaneously, consumption demonstrated a more significant ascent, ranging between 9% and 11% compared to the corresponding period in 2022. Within this context, polyethylene production observed a 4% increase, consumption surged by 22%, and imports experienced a 10% uptick. However, exports faced a sharp decline of 50%. Polypropylene displayed a commendable 7.6% increase in production, accompanied by a 12% rise in demand and a substantial 44% increase in imports.

The surge in formaldehyde resins production, particularly commencing in September, signifies a rebound in demand or other contributing factors that have propelled this category to a notable 9.6% increase. The momentum gained in the latter part of the 11-month period could be indicative of evolving market conditions or specific factors impacting formaldehyde resin consumption.

Examining the broader landscape of the plastics industry in Russia, the earlier-reported 2.1% increase in production for the first nine months gains context against the subsequent 11-month data. The range of 9% to 11% growth in consumption during this period underlines the market's responsiveness to plastic products. The divergent trends in imports and exports, with a surge of 10% in imports and a significant 50% decline in exports, reflect the intricate balance of domestic demand and global market dynamics affecting Russia's plastics trade.

We remind, Central Asian countries, Afghanistan and Mongolia raised their imports of Russian fuel by around 28% in 2023 to almost 6 MMt, partially offseting a decline in Russian supplies to Europe, according to traders and industry data. Russia has drastically cut supplies of commodities, including oil and gas, to Europe amid deteriorating relations over the conflict in Ukraine.

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