Page 121 - RusRPTOct21

construction materials (shift of gondolas to coal transportation). As demand for gondolas remained strong, rates grew to RUB1,159/day, up 9% m/m. A more concentrated oil tank market kept rates unchanged, at RUB1,062/day. Overall, the 1% y/y total volumes growth in September came in line with RZD’s expectations. For October, the monopoly did not provide guidance.
Coal. In September, coal volumes were 31mnt, up 3% y/y. Prices remained elevated: last month, FOB Europe was $161/t, 15% higher m/m (vs. $45/treakeven), and FOB Far East was $173/t, a 6% m/m increase (vs. $50/treakeven). In addition to prices, we note that demand for Russian coal is also growing, as some countries are in an energy deficit (See our Globaltrans – Global energy crunch toenefit gondola rates of 30 September). As a result, gondola rates were up 9% m/m to RUB1,159/day.
Oil & oil products. The segment remains constrained by OPEC+ production quotas, although they have been eased in 2021. September railway volumes were 18mnt, up 11% y/y (and down 5% to pre-COVID 2019).
Building materials. Construction materials were at 11mnt, down 12% y/y on the highase of September 2020, when they grew 14%. In addition, we see pressure from the growing coal volumes, which compete with construction cargos for gondolas.
Metals. Metallurgical cargos were at 19mnt, up 3% y/y, fully recovering after the pandemic.
Cost of repairs. Repair expenses (the floor for gondola rates) were around RUB455/day, up 3% m/m.
Fleet. The gondola fleet expanded 1,353 units in August to 587,932 cars, which was a 3% annualised m/m growth. We believe that these new purchases were made for coal transportation, despite high car prices of RUB3.5mn. The tank fleet was stable at 182,012 cars, prices were at RUB4.0-4.5mn.
Outlook. In September, the 1% y/y expansion of cargo volumes was in line with RZD’s expectations. The monopoly did not provide guidance for October. With coal prices being more than 3x the breakeven for Russian producers, we expect the market to remain strong until 1Q22, at least.
● Trains
Russian Railways’ (RZD) cargo volumes were up 1.2% YoY in September
to an average daily volume of 3.5mnt, Interfax reports. The announced increase is better than RZD’s targeted increase of 0.08% YoY. A detailed breakdown of cargo type is not yet available.
121 RUSSIA Country Report October 2021 www.intellinews.com