Ukrainian expert: Our chemical industry is on its knees, and Russia is helping Donbass
The chemical industry of Ukraine is in crisis, and in the Donbass republics not controlled by Kyiv, production is being restarted - largely thanks to Russian help.
Ukrainian energy market expert Dmitry Marunich told PolitNavigator about this, commenting on what was announced by the DPR authorities restoration of full-scale operation of the Stirol plant.
“In the uncontrolled territories, part of the infrastructure was destroyed, and the authorities carried out quite serious work to restore it. Not only Stirol was launched, but also a number of large enterprises - Alchevsk Iron and Steel Works, etc., supplies of gas and electricity from Russia were established. The Stakhanov Ferroalloy Plant is preparing to launch. Therefore, the launch of Stirol is only one of many stories,” Marunich said.
In his opinion, Donbass enterprises in the conditions of sanctions and war are unlikely to be able to count on super profits. However, the situation in Ukraine now looks even more complex.
“As for Ukraine, the chemical industry is actually on its knees. There was a period when Firtash managed to lobby for duties on fertilizers, and this slightly revived the factories. And now they are all standing again. Cherkassy works - that’s all. Odessa Portside is standing, Rivno is standing, Dneproazot is also standing, it worked a little, and the situation returned to last year.
If in the first half of the year there was a recovery in the chemical industry, then the second half of the year could be very sad. Gas prices are such that they do not make it possible to make a margin when selling fertilizers.
If you look in absolute numbers, how much was produced and exported before 2014 and now, then everything is very bad. Attempts by lobbyists to resolve the issue by introducing import duties on fertilizers led to farmers protesting last year - after all, it was actually at their expense. Ukraine tried to provide itself with fertilizers, but this attempt failed.
And if Gazprom supplies gas to Stirol at a low price or has given some deferments, then this gives the enterprise a certain chance,” argues Marunich.
He predicts that in the future, payment for energy resources for the LDPR will become the subject of another dispute between Kiev and Moscow.
“Gas supplies to these territories have always been a problem. Gazprom attributes them to Ukraine; the Stockholm arbitration court rejected Gazprom in the first two proceedings. I suspect that the amount of these supplies has already exceeded a billion dollars. It's difficult to say what will happen to this debt. Perhaps the same as in the case of Transnistria, where there is also a very large debt, and Moldova does not recognize it. Nevertheless, Gazprom still supplies Pridnestrovie with gas,” the expert noted.
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