The Russian petrochemical industry is set to benefit from increasing domestic demand over the medium term, with non-oil industrial sectors emerging as the strongest driving force for growth.
That's according to a new report released by research and analysis company Business Monitor International (BMI), which predicts that domestic demand for petrochemicals will be fueled by structural changes to the economy. Since capacity expansion will be mostly attributed to this domestic demand-led growth, the balance between supply and demand will remain stable. However, opportunities for export will be present in certain isolated sectors.
Data from the Russian Federal State Statistics Service reveals that in the first half of 2013 total output of chemicals rose by 3.3 percent compared to the same period in 2012, while the year-on-year increase in production of rubber and plastics came in at 7.8 percent. These figures mean that the Russian chemical and petrochemical industries fared much better than other manufacturing industries that saw a zero growth rate.
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Meanwhile, in the first ten months of 2013 production of plastic in primary form went up 14 percent year-on-year, with output reaching five million tons. In the same period, synthetic rubber production grew just over five percent to 1.2 million tons.
The report predicts that the country will see a boost in polymer production, especially in polyethylene, in light of a per capita consumer spending rise of 59 percent between 2013 and 2017, compared to a regional average of 42 percent.