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December, the monopoly envisages a slide of 2% YoY, which we see as a negative message to the industry.
Coal. In November, coal volumes resumed their decline, down 1% YoY to 32mnt. We note that producers’ inventory releases supported them, as volumes fell less than the 10% YoY drop in production. The releases were caused by supportive coal prices (FOB): USD 49/t for Europe (vs. USD 40/t breakeven) and USD 58/t for Russian Far East export (vs. USD 45/t) in November.
Oil & oil products. The tank car segment lost 10% YoY to 17mnt, because of the production cut. Tank lease rates stood at RUB 900/day, flat MoM.
Building materials. Construction materials increased 6% YoY to 9mnt, but the growth rate was lower MoM, as building activity cooled down.
Metals. Metallurgical cargos were down 3% YoY, at 19mnt. This was due to the lockdown in major European countries, we believe.
Grain. Volumes increased 38% YoY to 3mnt due to the 2020/2021 harvest being almost as strong as that in 2017/2018 (the best ever). In our view, volumes will remain strong until at least February, when new export quotas are to be introduced.
Cost of repairs. Expenses for spare parts and repairs continued to decline: they were at RUB 440/day in November, down 28% YTD. This rate is the minimum level to which gondola rates can fall.
Fleet. The gondola fleet increased 1,998 units in October to 575,384 cars, and was up 3% YTD. The oil tank fleet was stable at 178,425 cars.
Outlook. In November, railway volumes declined again, as the trends of falling metals and coal resumed after October, when total volumes were up 0.3% YoY. For December, RZD sees a slide of 2% YoY, which, in our view, is a negative signal to the industry. We continue to believe that gondola lease rates are going to carry on falling due to the overhanging idle fleet.
● Trains
deficit of RZD’s investment programme for 2021-23 is RUB 890bn, or almost
Railways Industry new round of talks on locomotive liberalisation. Having
been frozen for more than two years, the theme of locomotive liberalisation – a
potential significant value driver for private operators, including Globaltrans – is
now once again back on the government agenda. The reason is simple: the
1.4% of the Russian budget’s revenues. Of this, RUB 262bn, or 11% of RZD’s
total capex, can be attributed to locomotive purchases. To cover this gap, the
government is considering liberalising locomotives (and reducing RZD’s capex
139 RUSSIA Country Report January 2021 www.intellinews.com
