Page 136 - RusRPTOct20

trillion rubles ($38.4bn), of, which half accounts for projects on development of raw materials supply.
Reuters reported. Russian metals and fertilizer companies were unable to convince the finance ministry not to hike the extraction tax (MET) during a meeting with Finance Minister Siluanov on 17 September​. The companies plan to meet with Deputy Prime Minister Belousov next week to discuss the planned MET hike. Separately, according to Interfax sources, the increase in MET for metals and fertilizers companies targets to generate revenue Rb54-56bn in 2021. The Ministry of Finance has already included in the draft budget for a three-year period proceeds from the increased MET for enterprises of the metallurgical and chemical sectors. The effect on the financial results of companies will not be significant, said Finance Minister Siluanov.
9.1.12​ Transport sector news
In August, total railway cargo volumes stood at 108mnt, -1mnt y/y (or -1% y/y).​ That came on the y/y declines of 2mnt (-12%) in oil to 17mnt, and 1mnt (-10%) in ferrous metals to 5mnt, but was supported by the 1mnt y/y growth in both construction materials and grain cargos. Gondola lease rates were flat m/m, at RUB800/day, as the gondola segment was supported by construction cargos. Oil tank rates were also flat m/m, at RUB875/day. Overall, the total decline in volumes of 1% y/y was better than the 5% y/y expected by RZD. However, the monopoly kept its target of a 5% y/y decline for FY20, which implies a 7% drop during September-December. We expect a 3-4% decline for FY20F, or a 4% monthly slide.
Coal.​ In August, coal volumes stood at 30mnt, flat y/y. We think that the reason is seasonality, as August and September usually show support for coal volumes on the eve of the heating season. Coal prices were $50/t for Europe (vs. $40-45/t breakeven) and $47/t for Russian Far East export (vs. $40-45/t).
Oil & oil products. ​The tank car segment was down 12% y/y to 17mnt. Due to low demand and the decline in crude oil production, refineries have started large-scale repairs, reducing output volumes. Tank lease rates were flat m/m at RUB875/day.
Building materials. ​Construction materials continued to grow, increasing 9% y/y to 13mnt in August. With the end of the summer, building activity is to slow down, and so the growth is likely to subside.
Metals.​ Metallurgical cargos declined 2% y/y to 20mnt. Ferrous metals declined the most: down 10% y/y to 5mnt. However, iron ore volumes grew 2% y/y to 10mnt against the backdrop of growing prices.
136 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com