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Karpatneftekhim asks the state to introduce duties on imported PE, PVC and caustic

February 28/2020

MOSCOW (MRC) -- The city council of the Ukrainian city of Kalush, where the largest petrochemical plant in Ukraine, Karpatneftekhim, is based, has reviewed and agreed on the text of an appeal to the President of Ukraine, the head of the Verkhovna Rada and the Prime Minister of Ukraine on the situation that has developed at the enterprise, Vikna reports.

It was previously noted that Karpatneftekhim from 2 January shut the production of low-pressure polyethylene (HDPE) due to the high cost of raw materials, which are not covered by the current world prices of the polymer.

In its appeal, the city council indicates that Karpatneftekhim is one of the largest taxpayers in the Ivano-Frankivsk region and in Kalush, therefore the shutdown of the enterprise, which employs 2,792 people, will have a negative impact on budgets of all levels, the labor market and lead to a social and economic explosion in the region . According to the optimistic scenario, they can reduce 20% of the workers, while the pessimistic scenario - up to 80%.

"This situation has arisen in connection with a non-competitive environment for domestic producers, caused by a sharp increase in imports to Ukraine and dumping prices for caustic soda, polyethylene and polyvinyl chloride and a high tariff for rail transportation," the statement said.

The City Council supported the statements and petition of Karpatneftekhim to initiate and conduct a special investigation into the import of caustic soda into Ukraine and the import into Ukraine of polyethylene and polyvinyl chloride and a petition to reduce rail tariffs, and asks the government to take measures to protect the domestic producer.

As the deputy general director of Karpatneftekhim LLC Yarema Rudik said at the session, the enterprise will not be able to operate without government intervention.

According to Yarema Rudik, the company has already submitted to the Ministry of Economy and Trade an application for a special investigation into the import of caustic soda, polyethylene and polyvinyl chloride into Ukraine. On February 12, the ministry launched a special investigation into caustic soda, and the application for polymers should have been considered on February 21. The special investigation procedure is lengthy - 200 days. Therefore, Karpatneftekhim LLC appealed to the Ministry with a request to introduce preventive measures (import duties) that can be applied 45 days after the start of the investigation.

As Jarema Rudik noted, meetings have already been held with representatives of ministries and the government has an understanding of the situation. In Ukraine, products, forcing out Karpatneftekhim LLC from the market, are imported from different countries, in particular from the USA and Saudi Arabia.

According to a DataScope survey by Market Report, last year, the total volume of polyethylene imports to the Ukrainian market grew by 10% compared to the year 2018 and amounted to 268.7 thousand tons. The largest increase in external supplies came from low-pressure polyethylene (HDPE). At the same time, according to the results of the first month of the current year, the total volume of imports of polyethylene (PE) on the Ukrainian market decreased by 8% compared to the indicator of 2018 and amounted to 19.4 thousand tons. The largest decline in external supplies was due to linear polyethylene (LLDPE).

Karpatneftekhim is one of the largest enterprises in the petrochemical complex of Ukraine. Currently, the company is capable of annually producing 300 thousand tons of polyvinyl chloride, 200 thousand tons of caustic soda, about 180 thousand tons of chlorine, as well as 250 thousand tons of ethylene and 100 thousand tons of polyethylene.
Author:Anna Larionova
Tags:PVC, PE, liquid caustic soda, kausticheskaya soda, HDPE, rigid caustic soda, Karpatneftekhim.
Category:General News
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