Photo:
TASS
Stopped gas supplies to Ukrainian producers of fertilizers
The Ukrainian gas transport operator Ukrtransgaz because of debts ceased to supply gas to the three chemical plant of Dmitry Firtash, thus almost completely stopping the production of nitrogen fertilizers in the country. This frees up room for the Russian manufacturers, who in 2016 has already occupied more than half of the Ukrainian market, and earlier this year increased its stake to 90%. Ukraine to supply Mr. Firtash last year tried to close their market duties from cheaper fertilizers from Russia, but in front of the seed and decided not to impose anti-dumping measures.
On Tuesday the company announced that it has restricted gas supplies to the three plants controlled by Group DF of Dmitry Firtash,– Rivneazot, Severodonetsk Association “Azot” and PJSC “Azot” (Cherkasy). As noted in the network Facebook, the representative of “Ukrtransgaz” Maxim Belyavsky, the reasons for that are the debt of enterprises and the lack of confirmed amounts of gas in the transmission system. This effectively stops all chemical assets of Mr Firtash in Ukraine: controlled by Ostchem (part of Group DF) “styrene” in Donetsk region was stopped with Severodonetsky “Nitrogen” in may 2014 — during the escalation of military operations from the security considerations. “Nitrogen” after two years of inactivity in October 2016 was resumed at 80% of the work of departments of nitric acid and ammonium, potassium and sodium nitrate, but worked for a short time.
Ukraine refused from the purchase of gas from “Gazprom”, is the autumn-winter season with low inventory levels in underground storage (now there were about 8.3 billion cubic meters), but in Kiev claim that the restrictions are not associated with a lack of raw materials. The interlocutor of Kommersant, close to the government of Ukraine, noted that the country due to warming enough gas. “But the less we use it, the less you will eventually have to buy. Such decisions limit the consumption”– he agrees, adding that the plants Dmitry Firtash’s really in debt. “And fertilizer at sowing is enough for us”, – says the source “b”.
Ostchem also claim that the restrictions will not affect the starting of agricultural season. They point out that seed will perform in 2017 all obligations to buyers due to the adequate stocks of fertilizers in warehouses. But if the plants will be stopped for a long time, it can help Russian producers to further increase its share in the Ukrainian market, says Konstantin Yuminov from Raiffeisenbank. Now it exceeds 50%, while the previous year was 31%, while domestic production covered about 34% of consumption in Ukraine.
Against this background, Dmitry Firtash previously required to impose protective tariffs on nitrogen fertilizers from Russia. The Ministry of economic development of Ukraine supported this, proposing to raise taxes to 18.8 to 31.8% for the different types of fertilizers for Russian companies. This mode should be introduced starting February 28: the toll of five years was introduced for the “KuibyshevAzot” (4,19%), JSC “Novomoskovsk joint stock company Azot”, “Nevinnomyssky Azot” (18,78%) and other enterprises of the Russian Federation (of 31.84%). But on February 14 the interdepartmental Commission for international trade of Ukraine has suspended antidumping measures against the import of carbamide and carbamide-ammoniac mix from Russia. The regulator noted that the current situation on the market supplies from Russia cover 80-90% of the total consumption in Ukraine. At the same time the Ministry of agrarian policy of the country has drafted a law reducing import duties on the most popular types of fertilizers as a measure to diversify supply.
Konstantin Yuminov adds: the current situation and the reduction in the supply of plants Dmitry Firtash can have a positive impact on ammonia prices. After the termination of deliveries of the Russian Togliattiazot during his conflict with “Ukrhimtransammiak” in late 2016-early 2017 (see “Kommersant” on 27 December 2016 and February 6) and stop the Ukrainian Odessa portside plant, ammonia prices exceeded $300 per ton. According to the analyst, Ukraine at least until the end of the sowing will not restore the anti-dumping measures against Russian chemists. Besides, adds Mr. Yuminov, with the price of gas to buy fertilizers in the Russian Federation and Ukraine is in any case more profitable than to restore its own production.
Olga Matushenko; Yanina Sokolovskaya, Kyiv