Russian Rail Freight Market Overview, April 2014
OREANDA-NEWS. In April 2014, freight volume was at 101.9 mln tonnes (down 0.8% or 0.8 million tonnes year-on-year), while freight turnover was at 174.5 bln tonne-kilometres (up 6% or 9.9 bln tonne-kilometres).
Coal. In April 2014, 24.4 mln tonnes of coal were transported (down 2.4% year-on-year), while freight turnover amounted to 69.2 bln tonne-kilometres (up 7.8% year-on-year). Amid a broad reduction in delivery volumes, it is worth noting a rise in deliveries on the Yugo-Vostochny line (5 times more year-on-year) due to shipments from Solovey-Export (6 times more year-on-year).
Reduced coal shipments were due to several factors. First, domestic lignite coal shipments fell (1,363,000 tonnes year-on-year) mainly from the Irkutsk Region, Krasnoyarsk and Trans-Baikal Territories. Second, domestic long-flame (K-grade) coal shipments fell (by 117,000 tonnes), mainly from the Kemerovo Region.
The main driver of increased coal freight turnover in April were export shipments from Erunakovo (shipped by Kuzbassrazrezugol and SUEK-Kuzbass, freight turnover up 23% year-on-year).
Coal prices in April 2014 were at USD 75 per tonne – a USD 2.5 decrease on March 2014.
Oil and petroleum products. In April 2014, transport volumes for oil and petroleum products, excluding liquefied petroleum gas, were at 20.6 mln tonnes (up 16.6%), with freight turnover at 27.3 billion tonne-kilometres (up 7.4%). Domestic transport rose 5% and export 1% year-on-year.
Transport volumes rose thanks to power gas deliveries (by 341,000 tonnes) on domestic lines from Limbei and Zeletsino.
Freight turnover increased due to domestic deliveries by Krasnodareconeft (up 2.6 billion tonne-kilometres) from Krasnodar 1 and the Omsk Logistical Support Department for the Novosibirsk Directorate of Russian Railways subsidiary Roszheldorsnab (up 6.1 billion tonne-kilometres) from Kombinatskaya.
Brent crude prices stood at USD 108 per barrel. Oil remains the only primary resource to have a relatively stable price over the past two years.
Liquefied petroleum gas. In April 2014, transport volumes were at 2.6 mln tonnes (up 7.1%), with freight turnover at 6.2 bln tonne-kilometres (up 9.5%).
Gas prices stood at €19.5 MW/h, down 27% against April 2013.
Construction materials. In April 2014, the total volume of construction material freight was at 16.1 mln tonnes (down 10.6%), with freight turnover at 10.2 bln tonne-kilometres (up 2.3%). Delivery volumes decreased on the Severny and Severo-Kavkazsky lines (11% and 33% respectively) and increased on Oktyabrsky (13%) line.
Ferrous metals. In April 2014, transportation of ferrous metals was at 6.0 mln tonnes (down 4.9%), with freight turnover at 9.3 bln tonne-kilometres (up 2.4%).
Freight turnover increased due to the growth in exports through Smychka (by 0.5 bln tonne-kilometres) largely to Taiwan by Evraz NTMK.
Steel prices remained flat at USD 533 per tonne, down by 1.4% year-on-year.
Iron Ore. In April 2014, transportation of iron ore stood at 9.0 mln tonnes (down 2.5%) and freight turnover at 9.4 billion tonne-kilometres (up 0.6%).
The price of iron ore stood at USD 105 per tonne, down 22% year-on-year, and down 10% on March 2014.
Scrap. In April 2014, transport of scrap stood at 1.4 mln tonnes (up 0.01%), freight turnover was 1.3 billion tonne-kilometres (up 2.9%).
Non-ferrous metals, ores and concentrates. In April 2014, freight volumes for non-ferrous metals amounted to 1.7 mln tonnes (down 18.7%), freight turnover was at 2.8 billion tonne-kilometres (down 6.1%).
Copper prices were at USD 6,757 per tonne, 3.5% lower year-on-year.
Grain. In April 2014, grain transportation was at 1.5 mln tonnes (up 67%), freight turnover was at 2.6 billion tonne-kilometres (+42.0%). Grain prices in April 2014 were at USD 248 per tonne, down 19.3% year-on-year.
Fertilisers. In April 2014, fertiliser transportation was at 4.3 million tonnes (up 10.3%), freight turnover was at 6.7 billion tonne-kilometres (up 6.2%). DAP was priced at USD 575 per tonne, 13.2% up year-on-year.
Rolling stock production in the “1520mm region”
In April 2014, CIS plants produced 7,100 units of rolling stock, which is 7.7% less than April 2013. Russian plants produced 6,100 units of rolling stock, 29% more than in April 2013. Ukrainian factories produced 700 units of rolling stock, 3.3 times less than in April 2013.
Prices for gondolas, platforms, hoppers, and oil tank cars continue to fall, ranging between USD 41,000 and USD 50,000 for a unit.
Gondolas. In April 2014, 3,500 gondolas were produced, one quarter higher than in April 2013. Gondola prices were between USD 41,000 and USD 44,000.
Oil tank cars. In April 2014, about 500 oil tank cars were produced (3.7 times less year-on-year). Ukrainian plants suspended oil tank car production. Oil car tank prices ranged between USD 46,000 and USD 50,000 per unit.
Hoppers. In April 2014, 840 hoppers were built (down 44% year-on-year). Of this number, 300 were grain hoppers, 300 were mineral hoppers, 200 were cement wagons, and 40 were ballast hoppers. Grain hopper prices ranged between USD 47,000 and USD 48,000 per unit, mineral hopper prices ranged between USD 48,000 and USD 50,000 per unit, and cement wagon prices were between USD 48,000 and USD 50,000 per unit.
Box cars. In April 2014, 700 box cars were produced (4% more than in April 2013). Box car prices ranged between USD 58,000 and USD 63,000 per unit.
Gas tank cars. In April 2014, 160 gas tank cars were produced (43% less than in April 2013). Gas tank car prices ranged between USD 61,000 and USD 65,000 per unit.
Platforms. In April 2014, 600 container platforms were produced, 7.3 times more than in April 2013 and about 250 universal platforms (3.4 times more than in April 2013). Platform prices ranged between USD 47,000 and USD 51,000 per unit in April 2014.
Russian railcar market
In April this year, gondola tariffs stood at RUB 450-500 (USD 12.5-USD 14) per day. Tariffs on other types of rolling stock were also lower than in December 2013.
Daily tariffs for leasing box cars in April 2014 fell to USD 28-USD 30. Daily tariffs on universal and container platforms fell to USD 24 and USD 22, respectively. Grain hopper tariffs stood at USD 25 per day. Mineral and cement hopper tariffs stood at USD 24. Daily tariffs on oil tank cars fell to USD 24-USD 25. Gas tank car tariffs fell to USD 36.
Russia's rolling stock fleet
Amid the increase in the average distance covered and lack of growth in volumes transported in April 2014, idle stock fell to 220,000 units, 18% of the total fleet. Brunswick Rail estimates that surplus rolling stock in April 2014 amounted to about 100,000-105,000 units.
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