OREANDA-NEWS. In September 2013, freight transport volumes stabilized to levels comparable to the previous year, coming in at 104.7 mln tonnes (down 1.6%, or 1.7 mln tonnes, year-on-year), while freight turnover was at 179.2 bln tonne-kilometres (down 1.3%, or 2.3 bln tonne-kilometres, year-on-year).

Coal. In September 2013, 25.8 mln tonnes of coal were transported (a 1.2% increase compared to September 2012), while freight turnover reached 65.5 bln tonne-kilometres (up 9% from September 2012). An increase in domestic volumes of coal to the European and Far East regions of Russia allowed for 1% growth in domestic freight turnover despite an overall decline of 7% in shipping volumes.

At the same time, coal prices rose by 8.1% to USD 82.5 per tonne compared to August of this year. However, it decreased year-on-year (down 8.2%).

Oil. In September 2013, transport volumes of oil and petroleum products were 19.6 mln tn (down 3.1% year-on-year), while freight turnover was at 29.2 bln tonne-kilometres (down 5.5% year-on-year). Domestic oil volumes grew by 5%, the majority of which was driven by increased volumes from Surgut, Limbey and Vetlasyan. Export volumes fell by 14%, due to a decline in exports from Skovorodino to China, as well as a lower export from Kstovsky oil refinery to Europe.

The price of Brent oil fell by 5% compared to the previous month and amounted to USD 108.4 per barrel.

Liquefied petroleum gas. In September 2013, liquefied petroleum gas transport volumes continued to increase and reached 3.1 mln tonnes (up 14.5% year-on-year), while turnover was at 6.8 bln tonne-kilometres (up 17.6% year-on-year). Gas prices grew by 3.8% vs. August 2013 to €26.8 MW/h.

Construction materials. Transportation of construction materials in September 2013 was at 19.5 mln tonnes (down 4.6% year-on-year), with turnover at 9.7 bln tonne-kilometres (down 8.5% year-on-year).

Ferrous metals. In connection with decreased construction activity, there was a decline in demand for rolled metal product. In September 2013, transport volumes of ferrous metals were at 5.6 mln tonnes (down 7.1% year-on-year), with turnover at 8.1 bln tonne-kilometres (down 18.5% year-on-year). This decline was seen in both domestic and export volumes. Rail shipments and production were down across all major production sites.

Steel prices continued to grow for the third month straight, reaching USD 542.5 per tonne, which was 0.5% higher than September 2012 levels.

Iron ore. In September 2013, transportation of iron ore was at 9.4 mln tonnes (up 5.3% year-on-year), with turnover at 9.7 bln tonne-kilometres (down 8.6% year-on-year). At the same time, total production of iron ore in September 2013 decreased by 3.3% year-on-year. Iron ore prices fell by 4.6% to USD 131.4 per tonne compared to August 2013, but were still 26% higher than prices in September 2012.

Grain. In September 2013, transportation of grain was at 1.7 mln tonnes (down 5.9% year-on-year), with turnover at 2.6 bln tonne-kilometres (up 8% year-on-year). The price of wheat continued to fall and stood at USD 228 per tonne, which was 26% lower than in September of last year.

Fertilizers. In September 2013, the transportation of fertilizers was at 3.6 mln tonnes (up 5.6% year-on-year), while turnover was at 5.8 bln tonne-kilometres (up 11.3% year-on-year). Domestic volumes decreased by 3.3%, while export volumes grew by 10.8%, due to increased exports to China, the United States and Ukraine. The price of DAP rose by USD 55, reaching USD 495 per tonne, USD 80 lower than in September 2012.

Rolling stock production
In September 2013, 7.2 ths units of rolling stock were manufactured (a decrease of 29%, or 3,000 railcars, compared to September 2012). In September the production of oil tank cars continued to fall, reaching a new record for lowest production rate in five years.

Gondolas. In September 2013, 3,100 gondolas were manufactured (down 49%, or 2,900 fewer gondolas, than in September 2012). The production of new-generation gondolas amounted to 550 units. In Kazakhstan, the first 50 NGR gondolas (on a ZK-1 base) were produced by Kazakh Railcar Company. Gondola prices in August were in the range of USD 50,000.

Oil tank cars. In September, 441 oil tank cars were produced (down 71%, or 1,100 unites fewer than in September 2012). At all production sites, except for UralVagonZavod, production of oil tank cars is effectively shut down (a mere 30 oil tank cars were produced at Azovmash, and only 10 at Andzhiask Factory). Prices were within the range of USD 55,000 to USD 57,000.

Hoppers. In September 2013, 834 hoppers were produced (down 24%, or 258 units compared to September 2012). The production of grain hoppers amounted to 300 units; cement wagons came in at 160 units and the other 80 units were ballast hoppers. Prices for cement wagons ranged between USD 48,700 and USD 56,000; for grain hoppers it was between USD 53,000 and USD 66,000, while for mineral hoppers it was between USD 50,000 and USD 54,000.

Box cars. In September 2013, 883 box cars were produced (up 76%, or 382 units from September 2012). The price for box cars ranged between USD 62,000 and USD 75,000.

Gas tank cars. 901 gas tank cars were produced (up 70%, or 370 units more than in September 2012). Following an increase in gas shipments, VKM and Azovmash are increasing their production of gas tankers and in turn lowering production of oil tank cars. Prices decreased to within the range of USD 73,300 and USD 80,000.

Platforms. In September, 590 container platforms were produced (twice as many units as in September 2012) and 352 universal platforms were produced (an 80% increase from September 2012). The main driver for this growth was the Roslavsky factory, which alone produced 400 units of container platforms. Prices for different types of platforms ranged between USD 50,000 and USD 58,000.

Russian railcar operating leasing market
In September of this year, tariffs for all types of rolling stock began to stabilize, or even grow slightly compared to August 2013, with the exception of oil tank cars, which continued to decline.

Tariffs for gondolas remained stable at USD 20-21 per day. Daily tariffs for box cars were USD 33. Daily tariffs for universal and container platforms grew slightly to USD 27 and USD 28, respectively. Tariffs for oil tank cars declined to USD 29-35, while daily rates for gas tank cars rose to USD 47. Tariffs for food-carrying tankers and vegetable oil tankers were at USD 40-41.

Russia’s rolling stock fleet
The average level of idle rolling stock in September 2013 was around 175,000 railcars. By our calculations, surplus rolling stock came in at 50,000–55,000 units. The average empty run ratio decreased to 77%. During the August-September period, production of railway wheels declined by 30% to 100,000 units per month, compared to production in the first half of 2013. In our view, this decline can be explained by lower amount of repair works and a greater amount of rolling stock write-downs, similar to declines that took place in railcar production at the end of 2012.