MOSCOW (MRC) -- The ban on the foreign currency purchasing, the hryvnya devaluation and the expected increase in import prices in March have paralyzed the Ukrainian polymer market. Sellers have stopped their sales and importers can not buy the currency to pay for contracts, reported MRC analysts.
On 24 February 2015, the National Bank of Ukraine (NBU) published the NBU Board's Act No.130. This Act came into force yesterday, on 25 February. According to the document, the interbank foreign exchange market is closed this week. Importers have been in no position to buy the currency since then.
Ever since the day before yesterday and yesterday's morning, traders reported the termination of sales of polymers. Material is held at the warehouses, reported MRC analyst Igor Grishchenko. Market players also do not understand what the foreign currency exchange rate will be on Monday, which entails additional risks in case of stocks' sale.
New customs tariffs are another factor in the sales' termination. Sellers are waiting for an increase in the import duty. This is stated in the Law of Ukraine "On Measures to stabilize Ukraine's payment balance in accordance with Art. XII of the General Agreement on Tariffs and Trade 1994". According to the law, the import duty on the entire 39th group of HS will be increased by 5%.
To hold stocks at the warehouses also makes sense because of the expected rise in prices of polymers in foreign markets in March. Higher oil prices have led to an increase in spot prices of aromatic hydrocarbons and monomers in February. As a consequence, market players expect contract prices of polymers to go up.
As reported earlier, the official exchange rate of the dollar against the hryvnya has almost doubled since the beginning of the year and was at UAH 28.3 per USD 1 on 24 February. At the same time, the hryvnya exchange rate against the dollar fell even lower in the interbank market on Tuesday. Bid prices were at UAH 32 per USD 1. Sellers' prices (Ask) were at UAH 33.5 per USD 1.
MRC