Page 104 - RusRPTApr19

both Europe and Newcastle prices are still above our breakthrough point of $70/t, which motivates Russian producers to export coal; volumes were up +1.3% y/y.
Oil & oil products. Oil volumes were flat, and as Transneft has no plans for a further significant expansion of its pipes infrastructure, we change our expectations on oil volumes in the near term from negative to neutral. The oil segment accounts for almost 30% of Globaltrans’ overall operating revenues.
Metals. Steel prices climbed during February, with volumes increasing +4% y/y.
Grain. Grain prices were high in February, which was unattractive for buyers and slowed down trading activity (volumes -8.3% y/y). However, as the Ministry of Agriculture raised its 2019 harvest forecast to 118mnt (+5% y/y), volumes might be supported by the lower prices Railcars. There is a one- month lag in fleet data, so only that for January is available: the gondola fleet increased by 2,700 cars, so the fleet expanded to 530,368 cars (+7% y/y) during the month.
On the tank cars market, we have seen write-offs of almost 900 cars and see the total fleet at 178,095 units.
February prices on the gondola market were high: RUB3-4mn by unit (+28% y/y).
Tank car prices also increased, to RUB3.6mn (+16% y/y).
Outlook. Gondolas production has stopped the growth of lease rates and is reducing the gondola deficit. However, we think that high prices for new cars might keep lease rates at their highs and support Globaltrans’ revenues.
104 RUSSIA Country Report April 2019 www.intellinews.com