Moscow (MRC) - Last week, the Ukrainian currency depreciated by almost 44%, according to the official rate of the National Bank of Ukraine (NBU). On the back of such depreciation many traders have temporarily suspended the sales of polymers, according to ICIS-MRC Price Report.
Until the 5, February there were three of the dollar exchange rates in Ukraine: indicative NBU rate, the rate on the interbank exchange and the so-called real exchange rate. On 5, February, the National Bank refused from the indicative dollar exchange rate and currency auctions, which led to another wave of devaluation. Over the two days exchange rate fell by 44%; because of the depreciation of many traders on 6, Friday suspended their polymer sales.
Prices for large volumes polymers (polyethylene, polypropylene, polystyrene, polyvinyl chloride) decreased in February in foreign markets. Many traders because of the price drop in foreign markets went on a proportional reduction in polymer prices in the Ukrainian market.
In the beginning of last week deals for low density polyethylene (LDPE) started at the level of hryvnyas (UAH) 26,000/tonne FCA, including VAT; prices for homopolymer PP were on average at UAH29,000/tonne FCA, including VAT. But on Thursday against the back of the hryvnya depreciation, many traders have begun to raise prices, and on Friday they suspended all sales.
It is highly probable that in the near future traders will again fix polymers prices in dollar terms, while the price in local currency will be converted at the exchange rate at the time of payment. This practice was already seen last year, when there were serious exchange rate fluctuations.
MRC