Russia’s chemical production continues to grow

Russia Feb12.pngRussia has been the great exception in regional chemical markets.

Normally, production growth starts at a high level, often 15% a year or more, and then slows as markets become more mature. But in Russia, output collapsed with the Berlin Wall after 1989, and growth was actually negative until the mid-2000s.

Since then, there has been a strong recovery. This makes sense from a feedstock perspective, as Russia was the world’s largest oil producer in 2009-10 (as Saudi operated OPEC quotas). Oil is now setting new post-Soviet records at 10.3mbd, with gas output also increasing.

As always, the blog is grateful to Sergei Blagov of ICIS news for the data in the above chart, and further insight into some key areas:

• Production growth slowed during 2011 from 2010’s very high levels
• Fertiliser output (blue line) grew 5% to 19m tonnes
• Polymers output ( red) grew 9% to 5m tonnes
• Synthetic rubber output (green) was up 5% at 1.4m tonnes

These were still strong rates by historical standards. Polypropylene was particularly robust, up 12% at 722KT: polyethylene was up 8% at 1.65MT; polystyrene was up 14% at 348KT; and PVC was up 6% at 636KT.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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