Moscow producers of chemical products in 2020 significantly increased the volume of deliveries abroad. Statistics from the first eight months of last year showed a 14.8% increase in exports compared to the same period in 2019. China, Turkey and Belgium showed the most intensive growth in the volume of purchases. The total amount of contracts for these destinations exceeded $460 million.
The pandemic has increased the demand for polymers produced in Moscow
Vladimir Yefimov, deputy mayor of Moscow on economic policy, commented on the situation with exports of Moscow enterprises of the chemical industry. In 2019, the total volume of exports in monetary terms amounted to 1.8 billion dollars. In the eight months of 2020, this figure exceeded $2 billion. China, Turkey and Belgium combined to quadruple purchases to $467.87 million, accounting for almost a quarter of Moscow's total chemical exports.
According to Efimov, China remains the leader in purchases. In 2020, Moscow delivered to this country chemical products worth 324.43 million U.S. dollars. In terms of Russian-Chinese trade relations, this is a six-fold increase compared to 2019. Chinese partners mainly bought polymers: polypropylene - for more than 107 million dollars and polyethylene - almost 205 million dollars.
The deputy mayor of Moscow explained that such a significant increase in demand for these materials was not least due to the pandemic - they were aimed at mass production of personal protective equipment.
Similar dynamics and composition of the demand can be seen from the results of trade relations with Belgium. The Moscow industrialists exported there mostly polymers for the production of protective equipment: polyethylene for almost 10 million dollars and polypropylene for twice that amount, 19 million dollars. In addition, spirits and fatty acids to the amount of $1.43 million were shipped to Belgium. Such production of Moscow chemical enterprises is in demand by Belgian partners for the production of soap, solvents and plasticizers. The total amount of export contracts with Belgium for 8 months of 2020 was almost 33 million dollars, which is more by 185% than in the same reporting period of 2019.
A similar situation can be traced in the contracts of Moscow industrialists with Turkish buyers. So, according to Alexander Prokhorov, the head of the Department of Investment Policy of Moscow, the total amount of contracts in this area increased in 2020 by 137.6% and amounted to 110.45 million U.S. dollars. Just as in the case of China and Belgium, polymers were in great demand, but also a significant volume of supplies came from protective and decorative inorganic dyes, used for a wide range of industries - from dyeing fabrics to aircraft fuselages. Moscow-made dyes of the kind were shipped to Turkey for $16.38 million, Prokhorov added.
State support for Russian exports in a pandemic
The global pandemic COVID-19 with all its restrictions in the first months had a significant impact on international trade relations. In the first half of 2020 there was a slight decline in Russian exports of products of the chemical industry. Thus, the total volume of foreign shipments of Russian chemistry fell by 15% compared to the same period of 2019, amounting to about $10.6 billion. This was reported during the plenary session of the 8th Moscow International Chemical Forum by Zhanna Martynova, director general of the analytical agency "VladVneshService". The most tangible decline was observed in the fertilizer industry - by 20%, inorganic chemistry - by 17%, organic chemistry - by 27%.
On the other hand, some other important segments of export goods of the chemical industry not only did not suffer from the global crisis, but even increased their volumes. For example, exports of plastics and plastic products grew by 16%.
In the second half of 2020 the situation with the export of Russian chemicals and chemical products began to stabilize until the recovery of growth, in some places significant. Those supply chains that were disrupted during the most radical and acute restrictions began to recover, and the structure of demand changed. Russian business and the country's leadership promptly responded to these trends, working together to minimize potential damage.
Assistance to the chemical industry was also provided in terms of information and promotional support. For example, in October 2020 the international exhibition "Chemistry 2020" organized by the Chamber of Commerce and Industry of the Russian Federation, the Russian Export Center and Expocenter JSC took place. During the exhibition, the REC successfully held a consulting session in the online format on the topic of support for exports of chemical products. The session was moderated by Sergey Selivanov, head of the Department of Exhibition Activities of the Chamber of Commerce and Industry of the Russian Federation. During the event, he announced plans to more actively use mechanisms of state support for exports in general and chemical products in particular.
Coordinated work of the Moscow chemical enterprises and Moscow authorities showed positive results. The active assistance to exporting companies was provided by the center "Mosprom", which is under the jurisdiction of the Department of Investment and Industrial Policy.
The specialists of Mosprom individually selected support measures, which are the most justified and necessary for each specific industrial exporter in the current crisis. Thus, technical issues were promptly resolved, assistance in overcoming administrative difficulties, restructuring of the potential sales market and finding new buyers was provided. Certain Moscow exporters received direct financial incentives to compensate the costs of goods delivery.