Rosstat confirms preliminary estimate of 1.4% GDP growth for Russia in Q1

Russia's GDP grew 1.4% in Q1 2025 compared to a year earlier, according to the first official estimate published by Rosstat on Wednesday, which matched preliminary calculations, as per Interfax.

In current prices, Q1 2025 GDP amounted to 47.7468 trillion rubles, with the GDP deflator reaching 106.7% compared to Q1 2024.

As reported, Russia's GDP grew 4.5% YoY in Q4 2024, 3.3% in Q3 2024, 4.3% in Q2 2024 and 5.4% in Q1 2024. For the full year 2024, Russia's economy expanded 4.3% after growing 4.1% in 2023.

GDP growth in Q1 2025 was primarily driven by an increase in the physical volume of gross value added across the following sectors: construction - 7.3% (with the expansion of construction activity being supported by the implementation of major investment projects); manufacturing - 4.5% (production of other transport equipment - 35.8%, fabricated metal products - 18.2%, computers, electronic and optical products - 12.7%, repair and installation of machinery and equipment - 10.2%); hotels and restaurants - 6.8% (reflecting increased demand in the food service market, which grew 7.1%).

Additional positive contributions came from financial services (17.5% growth), cultural and sports activities (9.5%), telecommunications (2.8%) and agriculture (1.1%).

However, several sectors experienced declines in their physical volume index of value added during Q1 2025, including the mining sector - 4.0%; the supply of electricity, gas, steam and air conditioning - 3.8%, and real estate operations - 1.6%.

As reported, the Economic Development Ministry's baseline scenario forecasts Russia's GDP growth at 2.5% for 2025. The ministry maintained this projection from its September version in April.

The Central Bank of Russia's 2025 forecast is more conservative, at 1%-2%. Current GDP trends are developing closer to the lower bound of the CBR's projection, Central Bank Governor Elvira Nabiullina said during a briefing on June 6.

Analysts surveyed by Interfax in early June predict GDP growth of 1.5% for 2025.

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The U.S. Treasury Department has extended an exemption from sanctions for Russia's Sakhalin-2 offshore oil and gas project to allow oil exports to Japan, provision of oilfield services and transactions involving Gazprombank, including transactions involving Sakhalin Energy LLC until December 19, 2025, the department's Office of Foreign Assets Control (OFAC) said in a press release, as per Interfax.

The United States imposed a ban on provision of services related to oil production in Russia, both export and re-export of these services, on January 10, 2025, but an exemption was made for Sakhalin-2.

OFAC said the ban concerns services related to exploration, drilling, well completion, production, refining, storage, servicing, transportation, acquisition and sale of crude oil and oil products, as well as any types of activities that enable Russia to develop oil and gas fields, and maintain or expand domestic hydrocarbon production and refining.

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On Tuesday, ethylene prices rose in Northeast Asia, while remaining stable in Southeast Asia, as per Polymerupdate.

CFR North East Asia ethylene prices on Tuesday were assessed at the USD 815-825/mt levels, an increase of USD (+20/mt) from Monday's assessed levels. An industry source in Asia informed a Polymerupdate team member, "Prices rose on the back of an improved regional buying momentum."

Meanwhile, CFR South East Asia ethylene prices on Tuesday were assessed at the USD 845-855/mt levels, unchanged from Monday's assessed levels.

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Dutch chemical recycler Corsair Group International Holding BV is partnering with Swiss-based sustainable material distributor Kera Energy AG to globally distribute pyrolysis oil (pyoil), according to a statement by Kera Energy, as per Chemweek.

Kera Energy has an overall plastics processing capacity of up to 300,000 metric tons per year in compliance with ISCC Plus and REACH regulations, according to the company. The partnership will help commercially optimize sustainable feedstock transportation for the chemical industry, including bionaphtha and pyoil, it said.

Sustainable feedstocks are often required to be transported by ships carrying the necessary sustainability certifications, as the whole value chain along the production of sustainable chemicals will be audited by the ISCC Plus issuer.

Kera will utilize Corsair’s pyoil, produced from mixed plastic household waste at facilities in Thailand, Finland and planned future facilities, it said.

Pyrolysis is one of the prevailing routes to chemically recycle waste plastics back to its building block state. The pyoil can then be processed and fed into a steam cracker as a drop-in naphtha substitute for use in the production of virgin-quality plastic products.

Platts, part of S&P Global Commodity Insights, last assessed the feedstock waste plastic bales for the pyrolysis process at €250 per metric ton DDP Northwest Europe, stable week over week.

The chemical industry has increasingly focused on advanced recycling in recent years, with numerous petrochemical players investing in projects across Europe, the US, the Middle East and Asia. These include pyrolysis of mixed plastic waste, molecular recycling of recycled polyethylene terephthalate, and mechanical recycling of food-grade polystyrene.

However, significant setbacks were recently seen in the global chemical recycling industry. US-based Eastman Chemical faces a $375 million loss in funding for its advanced recycling project after the US Department of Energy revoked support for the company’s molecular recycling initiative at Longview, Texas, on May 30.

In Europe, Dutch-listed chemical recycler Pryme faces its own operational challenges, having halted its pyrolysis plant due to a discharge valve leak and expecting €1.5 million in capital expenditure during 2025 to improve oil quality. The company disclosed that the quality of pyoil produced by Pryme in 2024 and in first quarter 2025 did not meet the specification of the sales agreement signed with its main client, relating to a renegotiation of its offtake agreement with Shell.

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The average operating rates of Japan’s naphtha-fed steam crackers stood at 76.8% in May, down from 78.6% in April and 80.4% a year earlier, according to the Japan Petrochemical Industry Association (JPCA) on June 18, as per Chemweek.

Japan’s ethylene production in May stood at 420,100 metric tons, falling 7% from a month earlier but up 6% from the prior-year period, the data showed.

Market sources said Japan’s cracker operations will likely remain low amid the steam cracker turnaround season.

The Platts-assessed CFR Northeast Asia ethylene price rose $20 per metric ton day over day to $820 per metric ton on June 17. Platts is part of S&P Global Commodity Insights.

We remind, Japan's production of five major plastics was previously reported to have fallen 5.2% to 5.7 million tonnes in 2024 from the previous year, driven by weak domestic demand that led to lower output.

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