Page 121 - RusRPTFeb21

stated that it did not expect gondola rates above RUB600-800/day in 2021 due to the fleet surplus. It also expects oil tank rates to fall after negotiations on new Rosneft contracts in February. That is in line with our numbers.
Outlook. ​In January, railway volumes were up 1% y/y, as expected by the monopoly. For February, it sees similar growth of 0.6% y/y. Despite the surge in coal prices, demand for gondolas remains depressed, and neither RZD nor we expect a rebound in the coming year. In addition, there is pressure on the oil tank segment.
Total railway volumes for december 2020 were 107mnt, flat y/y. ​A 12% drop in oil (-3mnt) and 9% decline in ferrous metals (-1mnt) were mitigated by a 6% growth in coal (+2mnt), a 41% increase in grain (+1mnt), and other cargos. 2020 as a whole saw a 3% y/y decline in volumes against the backdrop of the pandemic. The outsiders were broadly the same: oil, ferrous metals and coal, which was hit in 1H20. In December, for the fourth month in a row, gondola rates were RUB750/day (-48% y/y), supported by fewer gondolas in operation (and growth of the idled fleet). Oil tank rates were RUB900/day (-12%). December volumes were better than the 2% decline expected by RZD. For 2021, RZD sees an increase of 2.5% y/y (our forecast is 2.8%). We forecast recovery in coal and metals due to the low base of 2020. Nevertheless, we expect total 2021 volumes will be below the 2019 level.
● Trains
Faster growth than expected from the preliminary January operating results for​ ​Russian Railways (RZD)​ February 1​. During the month, cargo volumes were up 1% YoY, surpassing RZD’s expectations. RZD’s deputy CEO commented on the January cargo volumes, which were based on the first 27 days of the months. RZD saw positive dynamics in grain (+70% YoY), scrap iron (+23% YoY), fertilizers (+10% YoY), timber (+8.7% YoY) and coal (+7% YoY), while oil products (-9.7% YoY) and iron (-13.4% YoY) showed negative dynamics. Total cargo volumes for the month were up 1% YoY to an average of 3.3mnt per day. RZD expects to see a 0.6% YoY growth in February, as the company expects to see a recovery in oil products and metals. RZD has a positive outlook for 2021 of 1.6% YoY growth.
● Ships
A powerful Russian icebreaker has crossed the Northern Sea Route for the first time at this time of year as ice coverage shrinks ​in the rapidly melting Arctic. The liquefied natural gas (LNG) tanker Christophe de Margerie made it through the Chukchi Sea and into the Bering Strait on Saturday, Jan. 16, after 10 days in thick sea ice. “It is a historical day for the development of the Northern Sea Route and national shipping,” Transport Minister Vitaly Savelyev ​said​ Monday. He said the voyage, which shows the shipping route
121 ​RUSSIA Country Report​ February 2021 www.intellinews.com