It is proposed to build coal chemical plants in Donbas and Kuzbass

Alexander Titov, Senior expert at the Energy Department of the Institute for Energy and Finance, commented to Mashnews on the prospects for the Russian coal chemical industry development.

"The prospects for the industry to overcome the crisis are directly related to the recovery of global coal prices. Until they start to grow, the government simply will not be able to block this price effect with any support. The main hope of coal miners is to restore prices and weaken the ruble: if this happens, the situation will begin to improve," Alexander Titov said.

The experience of previous years shows that the industry is cyclical – after a recession, an upswing begins again, so the task of companies is to wait out this difficult period, the expert added. According to his forecasts, the price recovery may begin in 2026. Probably, not everyone will survive by this time, and some of the mines will be closed. Other players will be absorbed by stronger enterprises – such consolidation often occurs during a crisis. Large companies with their own fleet of wagons for transporting products and their own terminals for transshipment at the port will feel more stable. In addition, many of them have prepared a financial cushion for themselves during the period of high profits in 2021-2022.

"It will be more difficult for small companies – they will either be absorbed, or they will reduce production, switch to mining other brands of coal, ask for state support and somehow survive this difficult time. Some mines will go bankrupt – these are the realities of the market. But I don't think there will be any critical drop in production or a wave of mass bankruptcies," the expert believes.

According to Alexander Titov, there are already enough existing polymer production facilities in the world today, including from coal, so investors will not "rush" into this niche.

"The Chinese are launching huge capacities, and there is a feeling that the market is already overstocked with these basic products – polyethylene and so on. The investor, before investing, will look at what is happening in this market, and will see that there is already an excess of these products. Therefore, the development of coal chemistry in Russia will be gradual, and we should not expect any rapid breakthrough in this direction,” the Mashnews interlocutor concluded.