Page 102 - RusRPTDec19

Building materials. ​Construction materials volumes lost 2% y/y, as gondolas steadily returned to coal transportation. Cement decreased 11% y/y, which, in our view, might have been caused by the introduction of escrow accounts and slower development rates.
Metals. ​Metallurgical cargos fell 3% y/y in November, as both domestic and international prices on ore and steel trended downward.
Railcars. ​The gondola fleet increased 2,532 cars in October, taking it to a 7% (25,682-car) y/y expansion of to 556,050 cars. The oil tanker fleet growth returned back to normal rate, added 137 cars to 178,476 in October with no total production in CIS countries. Prices on the gondola and oil tank markets were flat m/m in November, remaining high at RUB3.1-3.6mn.
Outlook. ​In November, railway transported volumes broke the growth trend started in September, contracting 2% y/y. While coal-supported volumes, declines in oil and metallurgical cargos offset the positives and caused RZD to post red numbers again. The FY19 target of 1,283mnt requires December volumes to increase 3% y/y to 112mnt. We believe this is likely to be challenging, given the unfavourable market conditions.
102​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com