Page 123 - RusRPTMar21

Russian designed and built NPP produces far more power than the small republic needs and the hope was always to earn some extra cash from exports.
9.1.12 Transport sector news
In February, railway volumes stood at 97mnt, down 3% y/y due to the base effect of the leap year, while on a comparable base they were up 1% y/y (+1mnt).
The y/y drops of 6% in oil (-1mnt) and 3% in metals (-1mnt) were offset by the y/y growth of 5% in coal (+1mnt), 38% in grain (+1mnt), and 8% in other cargos (+1mnt). Despite the cold winter supporting coal volumes, gondola lease rates were flat m/m at RUB700/day (-42% y/y). The fleet surplus absorbed the increase in volumes. Oil tank volumes were supported as well, and due to the more concentrated market, that resulted in moderate 3% m/m growth in tank rates to RUB925/day (-18% y/y). Overall, February’s total volumes came in line with RZD’s expectations. For March, the monopoly expects 2% y/y growth. This number might seem upbeat, but there is a low base from March 2020, when coronavirus kicked in. Expected volumes are still 4% below the level of March 2019.
Coal. In February, coal volumes were at 29mnt, up 5% y/y (hereinafter we use numbers adjusted for the leap year). For the third month in a row, they were supported by the cold winter in Europe and Asia. Coal prices (FOB) were $64/t for Europe (vs. $40/t breakeven) and $87/t for Russian Far East export (vs. $45/t). Demand is likely to decline gradually in March-April due to the improving weather. However, we still might see y/y growth because of the low base of 2020.
Oil & oil products. The tank car segment lost 6% y/y to 17mnt, an improvement from the 10% y/y decline in January. Again, we see the reason being the cold winter and related demand for energy sources. Tank lease rates stood at RUB925/day, +3% MoM.
Building materials. Construction materials fell 9% y/y, to 8mnt, due to gondolas switching back to coal transportation.
Metals. Metallurgical cargos were down 3% y/y, to 18mnt, as European countries continued to face lockdowns.
Cost of repairs. Expenses for spare parts and repairs (the floor rate for gondola rates) were around RUB430/day, down 26% y/y and flat MoM. We note the upward pressure coming from the YTD surge in metals prices.
Fleet. The gondola fleet grew 1,399 units in January to 580,124 cars, which is
123 RUSSIA Country Report March 2021 www.intellinews.com