Page 134 - RusRPTSept21

containers enjoy competitive advantage over shipping lines. As demand for gondolas remained strong due to coal exports, rates climbed 11% MoM to RUB 1,061/day. Oil tank rates were unchanged, at RUB 1,058/day. Overall, the 1% YoY growth in August came 1pp above RZD’s expectations. For September, the monopoly envisages 1% YoY growth. Given that this implies flat seasonally adjusted volumes relative to August, we see upside, were weather-related issues to ease.
Coal. In August, coal volumes were 31mnt, up 2% YoY and 1% to August 2019. We remind readers that July showed 3% growth to 2019. We attribute the MoM decline to flooding in the Russian Far East. Coal prices continued their rapid gains: last month, FOB Europe was USD 139/t, up 18% MoM (vs. USD 44/t breakeven) and FOB Far East export was USD 161/t, up 13% MoM (vs. USD 48/t). This drove gondola rates to RUB 1,061/day, up 11% MoM.
Oil & oil products. Oil volumes remain constrained by OPEC+ production quotas, and stood at 18mnt. This is up 7% YoY, due to the low base, but 6% below August 2019.
Building materials. Construction materials were at 12mnt, down 6% YoY on the high base of August 2020, when the economy restarted after the lockdown, but 2% up to 2019.
Metals. Metallurgical cargos were at 20mnt, flat YoY, and 2% below the 2019 level. We believe that the segment was affected by weather-related issues as well.
Cost of repairs. Repair expenses (the floor for gondola rates) were around RUB 440/day, up 2% MoM.
Fleet. The gondola fleet expanded 1,215 units in July to 586,579 cars, which was 3% annualised MoM growth. The tank fleet was stable at 181,827 cars.
Outlook. In August, cargo volume growth of 1% to August 2020 came 1pp above Russian Railways’ expectations. For September, the monopoly sees another 1% YoY growth. With coal prices being more than 3x the breakeven for Russian producers, we expect the market to remain strong until 1Q22, at least.
Moscow is ranked first in the world for its transport efficiency, ahead of Shenzhen, and Singapore in second and third place respectively, according to study “Urban Transportation Systems of 25 Global Cities” by international consultants McKinsey’s released this week. Russia’s capital city has a high public-transport efficiency, ranking first in that subcategory too. McKinsey’s highly regard the level of electronic transport services in Moscow, including the development of transport mobile applications and the availability
134 RUSSIA Country Report September 2021 www.intellinews.com