Page 140 - RusRPTSept22

Although, companies could replace such a decline by an increase in exports as the metals are not sanctioned, the ministry expects.
Russia’s Ministry of Industry and Trade (Minpromtorg) predicts Russian base metals’ production will surge by 2030, Vedomosti reported on August 9, citing the ministry’s strategy.
There are two scenarios in the document – basic and conservative.
The former assumes aluminium output to reach 5.3mt (+35% vs 2021), copper – 1.1mt (+19%), zinc – 410kt (+2.1x), nickel – 280kt (+45%).
The latter scenario suggests aluminium production to rise to 4.3mt (14% vs 2021), nickel –to 240kt (+19%), zinc – to 210kt (+7%). At the same time, copper production may immediately decrease by 36% to 750kt.
Eventually, Minpromtorg anticipates the metals exports to rise by 2030 vs 2021 in the base scenario: aluminium by 38% to 3.9mt, copper – by 50% to 930kt, nickel – by a third to 260kt, zinc – by more than 150x to 155kt.
“Current uncertainty does not allow us to exactly predict the dynamics of the global metals’ market in L-T. Yet, UC Rusal and Norilsk Nickel have not seen tight sanctions and continue to export products as earlier,” BCS GM said in a note.
9.1.12 Transport sector news
July freight turnover on railway was down by 1.7% y/y, loading down by 5.5%. The declines are a bit lower than in June (2.8% and 6.5%, respectively).
Spot lease rates continue going down – index Rail Commerce posted further decline by 8% m/m to Rb2,485/gondola/day, off by 16% vs peak numbers earlier this year.
Overall freight volumes are down, but dynamics are different for different products. We continue to track the freight turnover by monthly press-releases of Russian Railways. So far we see gradual declines in volumes, although the picture is a bit more diverse: oil and oil products loading has increased (+2%) lately, while iron ore and ferrous metals transportation declined.
Given that Globaltrans relies heavily on long-term contracts with its main customers, the company’s dynamics may deviate from the overall market trends. But declining spot lease rates indicate that 2H22 will likely be weaker compared to 1H22.
140 RUSSIA Country Report September 2022 www.intellinews.com