Page 120 - RusRPTFeb21

traditional industries for Yakutia, they have had good dynamics over the past years. In 2020, we finished the year with gold production hitting a record high of over 38 tonnes... to become Russia’s third largest gold producing region,” he said. Nikolayev also said that Yakutia’s companies plan to increase coal output to 30mn tonnes in the next two years from the current 20mn tonnes, and to reach the output of 50mn tonnes until 2025.
9.1.12​ Transport sector news
In January, railway volumes stood at 101mnt, up 1% y/y (+1mnt). While oil fell 10% y/y (-2mnt) and metals 3% y/y (-1mnt), they were offset by the y/y growth of 5% in coal (+2mnt), 11% in fertilisers (+1mnt) and 70% in grain (+1mnt). We see the main reasons behind the strong coal being the i) growth in demand in Europe and Asia, and ii) low base of 2020. Despite this, gondola lease rates slid RUB50 to RUB700/day (-48% y/y, -7% m/m), not a good sign for the industry. We believe that the fleet surplus of 14% will absorb the volumes increase and stop the rates from growing in 2021. RZD expects the same. Oil tank rates were stable m/m at RUB900/day. We see the average rate in 2021F at RUB750-800/day, as oil volumes are unlikely to recover to pre-COVID levels. Overall, the volumes growth in January was in line with RZD’s expectations. For February, it sees a 0.6% y/y increase.
Coal. ​In January, coal volumes were up 5% y/y, to 31mnt. For the second month in a row, this was supported by the cold winter in Europe and increased demand in Asia. The rise was also due to the low base of 2020, with volumes still 6% lower than in 2019 and 1% below 2018. The trend is likely to continue in the short term, as coal prices (FOB) are supportive: $62/t for Europe (vs. $40/t breakeven) and $84/t for Russian Far East export (vs. $45/t) in January, and 1H20 created a low base.
Oil & oil products​. The tank car segment lost 10% y/y to 18mnt, because of the production cut. Tank lease rates stood at RUB900/day, flat MoM.
Building materials. ​Construction materials fell 4% y/y, to 8mnt, due to gondolas switching back to coal transportation, we believe.
Metals. ​Metallurgical cargos were down 3% y/y, at 19mnt, as European countries continued to face lockdowns.
Cost of repairs. ​Expenses for spare parts and repairs were at RUB430-435/day, down 28% y/y. This rate is the floor for gondola rates.
Fleet. ​The gondola fleet increased 1,454 units in December to 578,725 cars, and was up 3% YTD. The oil tank fleet was stable at 178,944 cars.
RZD’s gloomy expectations. ​During its press conference, the monopoly
120 ​RUSSIA Country Report​ February 2021 www.intellinews.com