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06/05/2019

Isocyanates Import to Russia in 2018. Forecast for 2019.

06/05/2019
Isocyanates Import to Russia in 2018. Forecast for 2019.
The increase in the consumption of isocyanates (first of all, of MDI) means that the global market needs a new plant with sufficient capacity every year. According to our research, the Russian market is also ready to have at least one world-scale factory to meet domestic (and, probably, export) demand for these components. It is appropriate at this point to recall that currently Russian market demand for isocyanates is completely covered with import.
The article analyzes the structure of Russian imports of isocyanates in 2018 and provides a preliminary forecast for 2019. At the end of 2018, the volume of TDI and MDI imports increased by 17%, in 2019 it can reach 60 thousand tons. The level of imports of polymeric MDI is expected to be at the level of 120-150 thousand tons. Product prices are also rising: in 2017 they increased almost by a third.

Isocyanates: application areas

The methodology includes:
The analysis resulted from foreign trade statistics by isocyanates HS codes.
Foreign trade statistics for 2016-2018.
Foreign trade statistics for all types of isocyanates, except polymeric MDI, for January-July 2018.
Foreign trade statistics for polymeric MDI for period from January to September 2017.
As for 2017, polymethylene polyphenyl isocyanate (polymeric MDI) made up the bulk of all isocyanate imports - 73.1% (120○629.08 tons; 254.53 million USD; 14○871.54 million rubles).

Toluene diisocyanates (TDI) import was at the level of 23.8% (39○250.27 tons; 132.79 million USD; 7○762.71 million rubles).

Methylene diphenyl diisocyanates (diphenylmethane diisocyanates, MDI) accounted for 2.6% of imports (4○250.91 tons; 11.01 million USD; 641.88 million rubles. Imports of other isocyanates, mixtures of various types of isocyanates and products based on them were less than 1%.
The structure of isocyanates import by type, 2017
The total volumes and change in isocyanates imports form 2016 to 2018 (as of September 2018) is shown in the diagram.
The structure of isocyanates import from 2016 to 2018, thousand tons

All monoisocyanates. Import and export.

In 2017, 44○381.97 tons of all types of isocyanates were imported to Russia, which is 1○259.47 tons more than in 2016. Import growth rate increased to 2.92%. In dollar terms, it became by 62.94%.

Export turnover in 2017 increased to 136.17 tons (annual growth rate 210.37%) against that of the previous year and amounted to 200.90 tons or 581.44 thousand USD in monetary terms (growth rate 310.91%).

For the first seven months of 2018, 26○941.52 tons (USD 105○733.63) were imported, so imports grew by 17.43% against the same period of the previous year.
The structure of isocyanates import and export from 2013 to 2018, thousand tons
Imported isocyanate prices, except laboratory reagents, varied:
1.35-28.32 USD/kg in 2016 (a hardener for inks based on m-toluidine diisocyanate is supplied at prices of 164.93 - 2○135.95 USD/kg);
1.33-54.73 USD/kg in 2017 (a hardener for inks based on m-toluidine diisocyanate is supplied at prices of 101.62 - 183.30 USD/kg,);
1.49-65.5 USD/g in 2018 (isocyanates based hardeners are supplied at prices of 90.27 - 138.67 USD/kg).
In 2016-2017, the weighted average cost of the exported product increased from 2.89 to 3.83 USD/kg. The growth was up to 32.39% from 2016 to 2017.

In general, in the reporting period, the weighted average price of both the imported and the exported product has been growing over the past three years, including 2018.

The largest importers annually supplying isocyanates are LLC Trust-Nord (22-25%), ООО Egida + (18-21%), ООО RIF Amethyst(8-18%). The listed companies receive up to 58% of total volume of imports.

In terms of isocyanates supply channels to Russia, the largest volume of isocyanates is imported from the Netherlands (29-39%), Hungary (18-23%), Germany (10-22%), Belgium (11-15%).

The leading manufacturers of isocyanates supplied the product to the Russian Federation are Covestro AG (29-30%), BASF SE (15-28%) and BorsodChem Zrt (19-24%).

The key producing countries are Germany (33-39%), Hungary (19-23%), the USA (6-12%), China (4-16%), the Republic of Korea (4-13%), etc.

LLC Nortex (3-42%) annually exports isocyanates (T80 TDI) to Uzbekistan. Manufacturers are The Dow Chemical (USA), Mitsui Chemicals & SKC Polyurethanes Inc.(Japan), Oci Corporation (Republic of Korea), Covestro Deutschland AG (Germany).

In 2017-2018, the main exporter LLC Trust-Nord (52-96%) supplies T80 TDI to Uzbekistan. Manufacturers are The Dow Chemical (USA), Covestro International SA (Germany), Basf Polyurethanes Gmbh (Germany).

Import and export of TDI

ICTC analysis showed that in 2017 39○250.27 tons were imported (50.45 million USD; 2○324.12 million rubles), that was 243.73 tons TDI (growth rate 0.62%) more than in 2016. Therefore, the growth rate was 61.26% and 42.73% in dollar and ruble terms respectively.

In the first seven months of 2018, imports grew by 16.41% against the same period of the previous year. The forecast of the annual imports for 2018 year was estimated at 45○690.39 tons that would be up to 200○296.61 thousand USD with the weighted average price of 4.38 USD/kg.
Prices for imported TDI, with the exception of laboratory reagents, varied:
in 2016, in the range of 1.41 - 4.28 USD/kg;
in 2017, in the range of 2.07 - 5.15 USD/kg;
in 2018, in the range of 2.07 - 5.24 USD/kg.
In 2018, a 40% water dispersion of dimer of toluene diisocyanate (isocyanate-containing raw material for the production of polyurethanes (400 kg)) was imported at the average price of 30.65 USD/kg.

In 2016-2017, the weighted average price rose from 2.11 to 3.38 USD/kg while the growth rate was 60.26%.

In 2016-2018, the largest importers were LLC Trust-Nord (24-28%), LLC Egida + (20-24%), LLC RIF Amethyst (9-20%), LLC Amethyst-Yug (5-6%), LLC Decafom (up to 4%), LLC Dow Izolan (up to 7%).

These companies took about 73% of imports, and imported T80 toluene diisocyanate (80% - 20% mixture of the 2,4 and 2,6 isomers of toluene diisocyanate).

In 2016–2018, the leading supplier countries were the Netherlands (32–39%), Hungary (23–24%), Germany (11–22%), Belgium (12–17%), the Republic of Korea (up to 8%), Latvia (3-5%).

The main producers of supplied TDI were Covestro AG (33-34%), BASF SE (15-30%), BorsodChem Zrt (17-24%).

Among key producing countries, the largest import volumes were provided by Germany (36-44%), Hungary (17-24%), USA (7-14%), Republic of Korea (up to 14%), China (up to 14%) and Saudi Arabia in 2018 (22%).

During 2017, 164.77 tons (643.42 thousand USD) were exported, which was 105.71 tons (growth rate 179%) of TDI more than in 2016. In dollar terms, the increase was 312%.
Prices for exported TDI varied:
in 2016, in the range of 1.97– 2○600.00 USD/kg (the most expensive product was toluene diisocyanate - component No. 2 for PU-2A adhesive of 700 g);
in 2017, in the range of 3.50 - 13.78 USD/kg.
In the reporting period, the weighted average price had risen from 2.64 to 3.90 USD/kg. Therefore, the growth rate from 2016 to 2017 was 47.67%.

LLC Norteks annually (2-47%) exports T80 TDI to Uzbekistan. Manufacturers are The Dow Chemical (USA), Mitsui Chemicals & SKC Polyurethanes Inc.(Japan), Oci Corporation (Republic of Korea), Covestro Deutschland AG (Germany).

In 2017-2018, the main exporter LLC Trust-Nord (64-98%) supplied T80 TDI to Uzbekistan. Manufacturer: the Dow Chemical (USA), Covestro International SA(Germany), Basf Polyurethanes Gmbh (Germany).

Import and export of MDI

In 2017, 4○250.91 tons were imported (11.01 million USD; 641.88 million rubles), that was 501.66 tons MDI (growth rate 13.38%) more than in 2016. Therefore, the growth rate was 69.68% and 50.79% in dollar and ruble terms respectively.

In the first seven months of 2018, import grew by 41.83% against the same period of the previous year. The annual imports in 2018 was estimated at 6○028.86 tons that was up to 23○202.83 thousand USD with the weighted average price of 3.85 USD/kg.
Prices for imported MDI, with the exception of laboratory reagents, varied:
in 2016, in the range of 1.34 – 7..22 USD/kg;
in 2017, in the range of 1.33 – 13.05 USD/kg;
in 2018, in the range of 1.49 – 7.89 USD/kg.
In 2016-2017, the weighted average price had risen from 1.73 to 2.59 USD/kg while the growth rate was 49.65%.

The major importers: LLC Neomer (26-28%), ZAO Huntsman-NMG (16-19%), LLC RT-Epaflex (6-18%), LLC Walter Hemi (11-15%), LLC Dow Izolan (up to 12%), LLC Basf (up to 17%), LLC NPP Macromer named after V.S. Lebedev (up to 6%). These companies account for up to 95% of imports.

In 2016-2018, the leading supplier countries were China (35-40%), the Netherlands (6-42%), Hungary (13-26%), and Germany (5-17%).

The main producers of supplied MDI are Wanhua Chemical (Ningbo) Trading Co., Ltd (up to 34%), BorsodChem Zrt (13-26%), Huntsman Holland BV (6-20%), Dow Chemical Company (1-22%), BASF Antwerpen N.V. (4-17%), Wanhua Chemical Group Co., Ltd (up to 12%), Kumho Mitsui Chemicals Inc (up to 11%).

Among key producing countries, the largest import volumes are provided by China (35-41%), the Netherlands (5-42%), Hungary (13-26%), and Belgium (4-17%).

During 2017, 25.89 tons (76.95 thousand USD) were exported, which was 20.36 tons (growth rate 368.25%) of MDI more than in 2016. In dollar terms, the increase was 312%.

In 2016 - 2017, the weighted average price falls from 3.54 to 2.97 USD/kg. The rate of decline of MDI price was -15.95% from 2016 to 2017.

LLC TD Medium-Stroy annually exported German-made 4,4-difinel methane diisocyanate (Dow Europe Gmbh) to Moldova. The company's export volumes in 2016 were 5.525 tons (18.94 thousand USD), for 2017 - 3.39 tons (13.89 thousand USD), for 2018 - 1 ton (1.96 thousand USD).

In 2017, LLC Astra-Market exported 20 tons of MDI (51 thousand USD) to China while LLC East-Siberian Trading Company exported 2.5 tons (12,05 thousand USD) to Mongolia. Manufacturing company is Wanhua Chemical Group Co., Ltd, China.

In 2016, sole trader Lyashchuk D.N. exported 2 kg (9.5 USD) to Uzbekistan, JSC Lomo - 1 kg (603 USD) to Vietnam.

Polymeric MDI

In 2017, 120○629.08 tons were imported (254.53 million USD; 14○871.54 million rubles), that is 12○409.72 tons of polymeric MDI (growth rate 11.47%) more than in 2016. Therefore, the growth rate was 58,10% and 38,83% in dollar and ruble terms respectively.

In the first nine months of 2018, imports had declined by 3.97% compared the same period of the previous year. The annual imports in 2018 was estimated at 115○840.18 tons that was at the level of 306.21 thousand USD with the weighted average price of 2,64 USD/kg.

In table 4.16 there are weighted average prices including all shipments.
Prices for imported polymeric MDI varied:
in 2016, in the range of 1,11 – 73,64 USD/kg;
in 2017, in the range of 1,15 – 82,93 USD/kg;
in 2018, in the range of 1,24 – 50,35 USD/kg.
In 2016-2017, the weighted average price had risen from 1.49 to 2.11 USD/kg while the growth rate was 41.84%.

The major importers in 2016-2018 were LLC Dow Izolan (31-36%), JSC Huntsman-NMG (9-13%), LLC Elastokam (6-12%), LLC Covestro (4-7% in 2016-2017), LLC Indesit International (4%), LLC Walter Hemi (up to 4%).

All these companies account for up to 58-69% of imports.

In 2016-2018, the leading supplier countries were the Netherlands (31–32%), Germany (9–31%), Belgium (15–35%), and China (15–17%).

The main producers of supplied polymeric MDI are Dow Chemical Company (34-40%), Huntsman Holland B.V. (14-19%), Wanhua Chemical Group Co., Ltd (15-17%); BASF SE (11-15%), Covestro AG (8-13%), BorsodChem Zrt (3%).

Among key producing countries, the largest import volumes are provided by Germany (11-35%), the Netherlands (26-30%), Belgium (11-15%), China (16-17%), and in 2018 Saudi Arabia (26%).

During 2017, 837.11 tons (2 010,10 thousand USD) were exported, which was 544.94 tons (growth rate 186.52%) of polymeric MDI more than in 2016. In dollar terms, the increase was 292.64%.
Prices for exported polymeric MDI varied:
in 2016, in the range of 1.09 - 12.12 USD/kg;
in 2017, in the range of 1.54 - 5.94 USD/kg.
In the reporting period, the weighted average price had risen from 1.75 to 2.40 USD/kg. Therefore, the growth rate from 2016 to 2017 was 37.04%.

Every year LLC Dow Izolan (66-88%) exports the largest volumes of polymeric MDI to Uzbekistan, Azerbaijan and Turkmenistan. The manufacturer is Dow (Netherlands, Germany, Saudi Arabia).

In 2017, LLC Star International St. Petersburg (11%) exported significant volumes of polymeric MDI to China, Nigeria and India. Manufacturers: Dow Europe Gmbh (Germany), Covestro Deutschland AG (Germany), Basf Polyurethanes Gmbh (Belgium).

In 2018, LLC Diorit-Technis exported a large volume of polymeric MDI to Ukraine (17%). Manufacturer: Dow Europe Gmbh (European Union).

Isocyanates import forecast for 2019

Monomeric

The total volume of imports by HS code 292910 decreased from 2013 to 2015, which was, apparently, due to a sharp increase in exchange rates. It declined from 73○413 tons to 43○010○tons. Since 2016, import volumes has begun to grow gradually, and by 2017 has reached 44○381 tons. In the first seven months of 2018, the import of isocyanates grew by 17% against the same period of 2016.

Taking into account the growth in 2016-2108 it is possible to predict the volume of imports in 2019 varied from 55○000 to 61○000 tons.

Polymeric

Statistically, the amount of polymeric isocyanates imported under HS code 3909310000 increased in 2016-2017. The volume of import grew up from 108○219 tons to 120○629 tons and reached 11%.

However, in the first nine months of 2018, the volume of import of polymeric isocyanates decreased by 4% compared to the same period of 2017.

According to our forecast, in 2019 the volume of import will range from 120○000 to 149○000 tons.

Taking into account the increase in demand and import growth of isocyanates, one can safely conclude that Russian market is ready for starting its own production of this chemical component.

The Engineering Chemical Technological Center possesses sufficient competencies and technological data that allow you to move quickly to the design stage of the production of isocyanates at a particular site. Detailed and analytical information as well as detailed calculations can be provided upon request.
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