Russia may face a problem of overcapacity in production of monomers and polymers in the coming years, due to demand for finished polymer products potentially growing more slowly than supply, according to recent statements made by some of the leading Russian analysts in the field of plastics production.
Tamara Khazova, director of the research department at Alliance Analyst, one of Russia's largest analytical agencies in the field of plastics production, revealed the production growth projections contained in the government's "Plan for development of the gas and petrochemical industry of Russia until 2030".
In this, the Russian government expects the production of hydrocarbon raw materials for pyrolysis to grow by 4.8 times, to 37m tonnes; ethylene to grow by six times, up to to 14.2m tonnes; large volume polymers (PE, PP, PVC, PS and PET) to grow by 5.8 times, up to 19m tonnes; medium volume polymers to grow by four times, up to 2m tonnes; and synthetic rubber to grow by 1.7 times up to 2m tonnes.
There are plans to build new production capacities in six clusters, at locations in the Volga, Western Siberia, the Caspian, East Siberian, Far Eastern and North-Western regions. The new enterprises will be established close to sources of raw materials, which will help to save on logistics costs as well as reduce capital and operating costs.
Khazova said the establishment of such large polymer production capacities highlights the need for greater demand for finished polymer products in Russia.
"Much will depend on the level of demand for polymer products in Russia. In the case of low demand we will be creating huge capacities for polymer production, but without processing facilities. We need to create this demand, both for polymer granules and polymer products," Khazova said.
Representatives of the Russian Ministry of Energy and Trade declined to comment, when contacted by European Plastics News.
However, according to earlier statements, the government expects successful implementation of the state plan to create conditions for the increase of consumption of petrochemicals in Russia to the level of western countries by 2030. It also expects the plan to increase the volume of processing raw materials.
The government believes that the Russian petrochemical industry needs to shift from an export-focused, commodity model of development to one focused on innovation and investment. This will help create up to 80,000 new jobs, it suggests.
The government expects the implementation of all the projects in the six clusters by 2030 to help the Russian petrochemical industry make a quantum leap. In particular, it expects the Russian industry to increase its share of global ethylene production to 5.6%.
In addition, by 2030 more than 60% of light hydrocarbons produced in Russia will be subject to further processing within the country, compared to the current 30.8%.