Metallurgists Call on the Cabinet of Ministers to Refuse to Shorten the Timeframe for Returning Foreign Exchange Earnings

Shortening the timeframe for returning foreign exchange earnings will lead to a deepening of the crisis in the Ukrainian metallurgical industry, as exporters may lose their last traditional markets.

This is reported in a letter from the Federation of Metallurgists of Ukraine to the Prime Minister and the Head of the NBU, which is at the disposal of the editorial office.

"Currently, information is being circulated about the development of a regulatory act by the Cabinet of Ministers together with the NBU, which will reduce the terms for returning foreign exchange earnings from 180 days to 90 days. In the current environment, given the new more complex and lengthy supply chains, such a reduction will have a negative impact on the export of mining and metals products. Currently, exports account for about 60%", the letter says.

The federation emphasized that the mining and metals enterprises suffered from the Russian war of aggression, lost significant production capacity and the ability to quickly export their products to foreign counterparties.

"Foreign partners consider Ukraine as a high-risk territory and therefore buy Ukrainian steel products on a deferred payment basis (+1-2 months from the date of delivery). Given the new supply routes, which are longer and more costly, Ukrainian producers need to ensure that they have finished products in stock in Europe to guarantee that contracts will not be breached. Currently, the estimated delivery time, barring force majeure, is 4-6 months. Taking into account the deferred payment, the cash flow cycle is 6-8 months, and in some cases 10-12 months," the FMU explained.

Under such circumstances, the fact of the new initiative of the NBU and the CMU may become a point of no return for Ukrainian steel producers, as they will be pushed out of traditional export markets, the federation emphasized.

"This will lead to a sharp decrease in foreign exchange earnings in Ukraine, entail a decrease in production volumes and job losses. Therefore, we ask you not to take harsh measures and additional restrictions on the timing of the return of foreign exchange earnings. At the same time, the easing of these restrictions will significantly support domestic producers of the mining and metallurgical complex, which in the long run will increase the inflow of foreign currency to Ukraine," the Ministry of Finance summarized.

As you know, the Cabinet of Ministers and the NBU began to consider reducing the terms of return of foreign exchange earnings after information appeared about the abuse of certain agricultural companies that transport grain "in the black".

At the same time, MP Dmytro Natalukha said that such radical and drastic decisions will kill the lion's share of decent Ukrainian exporters, so if several players break the rules, they should be punished, not the entire market;