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Ukraine Ferroalloy Producers Increase Export of Ferroalloys and Expect a Decrease in the Value of Exports of Electricity

  • Monday, November 24, 2014
  • Source:ferro-alloys.com

  • Keywords:Ferroalloy,Export,Electricity,Ukraine
[Fellow]Ukraine Ferroalloy Producers Increase Export of Ferroalloys and Expect a Decrease in the Value of Exports of Electricity

Despite the economic crisis in Ukraine, some of its sectors, namely industry segments show a positive trend. Thus, in January-August 2014 there was increase in export of ferroalloys in kind by 47.2% compared to the same period in 2013 - up to 640 thousand tons.

According to customs statistics released by the State fiscal authorities of Ukraine, in monetary terms, exports of ferroalloys increased by 37% - to $ 787 million in eight months.

According to the mining and metallurgical complex of Ukraine made public association "Metallurgprom" (Dnepropetrovsk) metallurgical enterprises of Ukraine increased exports of steel products in physical terms by 2.3%, or 0.4 million tons - to 17.9 million tons, but reduced in value terms - by 3.1%, or $ 0.3 billion - to $ 9.3 billion. As specified, the decline in export earnings was due to falling metal prices in world markets in January-August 2014.

At the same time, as the general director of association "Metallurgprom" Alexander Zrazhevskaya referred to the "DZI" for eight months in 2014, the export delivered were 14.950 million tons of metal (including semi - 6.850 million tonnes), iron - 1.650 million tons, ferroalloys - 570 thousand. tons, compared to the same period in 2013 : metal - 95% iron - 122%, ferroalloys - 131%.

The share of exports in total manufactured metal rolling was about 87% versus 81% in the first eight months of 2013.

According to the executive director of the Ukrainian Association of ferroalloys (UkrFA) Sergey Kudryavtsev, positive dynamics of Ukrainian producers of ferroalloys required a combination of factors, one of which was support from the Government.

"In general, a memorandum of support electrometallurgists gave a positive result - thanks conditions assumed by producers are increasing output and sales. But on November 12, 2014 the cost of electricity supplied to the steel mills are not economically justified.

The development of long-term programs was hindered by the lack of interaction between the state and enterprises, which, in turn hinders investment in production, because the owners do not have confidence not only in the progressive determination of pricing for electricity, but also in term (4-5 years) in the future. It was asked to sign a Memorandum of five years, during which no work price risk.

Although the industry is hoping that after the Prime Minister instructions for creating a working group, whose members will examine the conditions in which a Memorandum of electricity cost issues will be resolved in favor of Electro industry. This will increase investment in social standards, higher wages and improved training enterprises ", - said Sergey Kudryavtsev.

But without waiting for the resolution of these important issues, one of the leading enterprises in the industry "Pobuzskyy ferronickel plant» (PFC Kirovograd region.), Which is part of an international investment group «Solway», is set to improve energy security of Ukraine, in particular, by going to the end of the year in pulverized coal (PCI). According to the company management it will almost completely eliminate the use of such a precious and foreign (ie who will pay for currency) of natural gas.

Instead of pressing on the functioning of ferroalloy industry of Ukraine Chairman of JSC "Zaporozhye Ferroalloy Plant" (ZZF) Paul Kravchenko sees the need for extension of the Memorandum of Understanding between the Government and metallurgical plants for 5 years with a mandatory fixing the current value. Because of the inability to plan the strategy of the company in a continuity, not the projected increase in the cost of electricity.

"You also need to protect the Ukrainian producer on the domestic market. By introducing import duties or quotas on imports of ferroalloy production in Ukraine. You also need to abolish import duty on ferroalloys traveling to the EU market, "- says Pavel Kravchenko.

In his view, no motion is timely issue VAT refunds and returns to limit mandatory sale of foreign currency earnings to the level of 50%. As well as establishing an independent commission that monitors the activities of customs authorities in charge of trying to inflate the customs value of imported goods.

Functionary stressed that remained unresolved and painful issue of establishing a mechanism of state support in terms of energy saving measures, environmental measures, the use of resources sector. In business there are no incentives attached to the basic equipment and spare parts, including through the removal of tariffs on imported production equipment, which is imported to Ukraine.

Well, and finally be a radical reform of the system of rail transit and port facilities. These branches have to take a number of systemic measures to achieve competitive rates for the carriage, handling, storage of materials at international rates.

This will enhance the flow of capital, increasing amounts of foreign exchange earnings needed to stabilize the economy in Ukraine. In turn, the optimization of the logistics component will increase the competitiveness of Ukrainian exports, which will ensure the stability of tax revenues to the state budget.

  • [Editor:Phillip.Feng]

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