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Ukraine's ferroalloy firms warn government of shutdown unless power tariffs cut

Ukraine’s ferroalloy sector is on the verge of stoppage as companies report losses due to repeated hikes in power tariffs, companies in the sector warned Tuesday.

The companies, which include the country’s largest ferroalloy makers, wrote an open letter to the government asking to immediately cut power tariffs to the December 2015 levels and keep them unchanged for five years.

"This problem has become an issue of economic security of Ukraine," the companies said in the letter. "It puts under threat the entire sector and security of jobs."

The letter was signed by the heads of Nikopol Ferroalloy Plant, Zaporizhia Ferroalloy Plant, Zaporizhia Titanium and Magnesium Plant, Dniprospetsstal and Pobuzhskiy Ferronickel Plant.

Power tariffs for the sector rose several times over the past seven months.

Between December 2015 and May 2016, the tariffs rose by 5.6%, and since July 1 by another 10%. In the period from December 2015 to July 2016 the tariffs increased by 16.1%, according to the companies.

The companies argued that international producers of similar goods have advantages due to significantly lower price of power and support from their governments.

The top managers of the companies warned the entire sector may shut down and 22,000 workers may be laid off unless the government moves quickly to cut the power tariffs.

Ukraine’s output of ferroalloy rose 3.2% year on year to 489,900 mt in January-June, up from 474,800 mt produced in the same period of 2015, the association said.

Time: 2016-7-29 Click: 5
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