Ukrmetallurgprom has addressed the Prime Minister of Ukraine Vladimir Groysman asking him to cancel the railroad tariff and port fee discounts for coal and ore transportation from Russia from Q2.
The enterprise president Alexander Kalenkov believes that under present circumstances such a decision will make the use of the local transportation infrastructure more efficient and balance cargo flow through Ukrainian ports.
“Providing Russian companies with discounts on transportation, while they’re competitors of local mining and processing works, is carried out on the background of the Ukrzaliznytsia initiative to increase transportation tariffs by 25%, and the practice of 100% port fees on local exports, which is direct discrimination of Ukrainian exporters”, he wrote in the letter.
The latest events in the country resulting in the complete halt of cargo connection with the temporarily occupied territories make one look at the problem of transportation discounts from Russia from the other side.
Kalenkov noted that because of the blockade pig iron output would drop by 4 million tons resulting in the necessity to increase iron raw materials exports through deep water ports by 0.5 million tons per month (in addition to some 1.2 million tons per month exported before the blockade).
Ukraine will also have to start importing around 0.6 million tons of anthracite per month, mostly using sea transport, as well as 0.4 million tons of coking coal.
Such an increase in transportation will inevitably exceed the throughput capacity of Ukrainian ports resulting in two negative consequences.
First, it will be impossible to transship enough volumes of imported coking coal leading to the further decrease in metal output.
Second, iron ore raw materials exports will also drop resulting in the decrease in the mining output.
“Under such circumstances the practice of giving transit discounts on iron ore originating from Russia bears risks of decrease in metal and mining output with a highly negative impact on the payment balance of Ukraine”, Kalenkov said. (Ukrainian metal)