SIBUR Begins Polypropylene Imports to Reduce Deficit

SIBUR is beginning temporary imports of basic grades of polypropylene to reduce the existing deficit in the Russian market. The pilot shipment will amount to 500 tonnes, with subsequent increases in imports up to 2 thousand tonnes per month.

The deficit in the Russian polypropylene market arose due to a forced shutdown of several plants unaffiliated with SIBUR (Stavrolen in Stavropol Krai and the Lisichanskiy refinery in Ukraine), which coincided with the seasonal increase in demand from polypropylene refiners.

The imported volumes will be sold at market prices with a minimal commission from SIBUR. The polypropylene will be purchased from China, India, and the Middle East.

«SIBUR's strategy is focused on developing the base polymer segment, with polypropylene refiners as our key clients», Sergey Komyshan, Managing Director and Head of SIBUR's Basic Polymers Division said.

«It is important that we support our customers until our Tobolsk-Polymer project is put into operation. The increased production volumes at our existing sites, coupled with additional imports of polypropylene, will help to reduce the price pressure on refiners from independent traders».

In 2011, Tomskneftekhim produced 128.8 thousand tonnes of polypropylene, while SPE Neftekhimiya, the joint venture between SIBUR and Gazprom neft, produced 114.4 thousand tonnes. The combined capacity of the two facilities grew in 2011 to 243.2 thousand tonnes, an increase of more than 11% from 2010.

Tobolsk-Polymer will be Europe's largest complex for the production of polypropylene, with a capacity of 500 thousand tonnes per year. Construction on the site is expected to finish in the third quarter of 2012, with production due to start in early 2013.