OREANDA-NEWS.  In February 2014, freight volume was at 93.3 mln tonnes (down 0.6% or 0.6 mln tonnes year-on-year), while freight turnover was at 161.4 bln tonne-kilometres (up 7.4% or 11.1 bln tonne-kilometres).

Coal. In February 2014, 24.3 mln tonnes of coal were transported (down 1.6% year-on-year), while freight turnover amounted to 64.5 bln tonne-kilometres (up 12.5% year-on-year). In addition, coal transport decreased in every region with the exception of the Kuznetsk Basin (Kuzbass), where the volume of shipments increased by 7%. Domestic shipments decreased by 10.2%, which was offset by an 8.4% increase in exports.

Coal prices were at USD 73 a tonne in February, a decrease of USD 7 from January 2014 and 20% year-on-year.

Oil and petroleum products. In February 2014, the freight transport volume of oil and petroleum products, not including liquefied petroleum gas, amounted to 18.7 mln tonnes (up 1.8%), with freight turnover at 28 bln tonne-kilometres (up 6.5%). Transports rose due to increases in shipments on the Kuibyshevskaya (Biklyan, Novokuibyshevsk, and Allaguvat stations) and Sverdlovskaya lines (Limbei, Turinsky, and Voinovka stations) of 8% and 9%, respectively.

Brent crude prices were at USD 109 a barrel, down 2.1% year-on-year. Oil is the only primary resource that has had a relatively stable price over the past two years.

Liquefied petroleum gas. In February 2014, the freight transport volume amounted to 2.3 mln tonnes (up 6.9%), with freight turnover at 6.7 bln tonne-kilometres (up 4.6%).

The price of gas was at €23.40 per MWh, a decrease of 11.5% year-on-year.

Construction materials. The total volume of construction material freight in February 2014 amounted to 11.4 mln tonnes (down 13.6%), with freight turnover at 7.7 bln tonne-kilometres (down 4.3%). Transport volumes decreased on practically every line. Delivery volumes increased only in industrial regions on the Sverdlovskaya, Zabaikalskaya and Vostochno-Sibirskaya lines.

Ferrous metals. In February 2014, the freight transport volume of ferrous metals amounted to 5.7 mln tonnes (down 1.1%), with freight turnover at 8.8 bln tonne-kilometres (down 1.8%). Domestic freight volume fell 4%, while export volumes increased by 3%, respectively. NLMK and Severstal decreased their production of ferrous metals, which resulted in a decline in shipments from these plants of 7.7% and 7%, respectively. MMK increased shipments of ferrous metals by 13%.

Steel prices were at USD 530 a tonne, a decrease of 10% year-on-year.

Iron ore. In February 2014, the freight transport volume of iron ore amounted to 8.4 mln tonnes (down 0.6%), with freight turnover at 8.6 bln tonne-kilometres (up 9.2%).

Iron ore prices were at USD 118 a tonne, which was 22% lower year-on-year and represented a decrease of 3.7% from January 2014.

Scrap. In February 2014, the freight transport volume of scrap amounted to 0.8 mln tonnes (down 11.1%), with freight turnover at 0.8 bln tonne-kilometres (up 2.4%).

Non-ferrous metals, ores and concentrates. In February 2014, the freight transport volume of non-ferrous metals amounted to 1.8 mln tonnes (down 11.5%), with freight turnover at 2.5 bln tonne-kilometres (down 8.3%).

Copper prices were at USD 7,160 a tonne, down 7.9% year-on-year.

Grain. In February 2014, the freight transport volume of grain crops amounted to 1.3 mln tonnes (up 30%), with freight turnover at 2.6 bln tonne-kilometres (up 27.7%). Grain prices have remained stable over the past six months at USD 228 a tonne; however, this represents a one-third decrease since February 2013.

Fertilizers. In February 2014, 4.2 mln tonnes (up 13.5%) of fertilizers were transported, with freight turnover at 6.7 bln tonne-kilometres (up 4.6%). The price of diammonium phosphate is at USD 480 a tonne, which is 0.2% lower than a year ago.

Industrial production in China in 2013
The index of industrial production in China in 2013 amounted to 109.7% compared to the same period in 2012. There is a seasonal influence on the country’s industrial production, with production in January and February more than 20% lower than in other months.

Coal. China produced 3.7 bln tonnes of coal in 2013, which was 2.6% higher than in 2012. China has 230 bln tonnes of coal reserves, which is enough to supply the country for approximately 60 years. The main source of reserves is concentrated in the north of the country, in the provinces of Shanxi and Inner Mongolia.

Coke. Metallurgical coke production in 2013 amounted to 473.1 mln tonnes, which was 9.6% higher than in 2012.

Iron ore. Some 1,436.3 mln tonnes of ore were mined in 2013, which was 8.1% higher than in 2012. China has 19.5 bln tonnes of iron ore reserves, which, at the current rate of extraction, should be enough to supply the country for the next 13 years. About one-third of the reserves are located underground in the Liaoning Province of north-eastern China, which borders on North Korea.

Oil. Oil production in 2013 amounted to 208.2 mln tonnes, which was 0.6% higher than in 2012. China’s current proven oil reserves amount to 3.3 bln tonnes, which, at its current rate of consumption, would supply the country for 16 years. China’s oil reserves are located in the north-west (the Xinjiang Uyghur Autonomous Region) and the north-east (the Heilongjiang and Shandong provinces), as well as under the ocean.

Natural gas. Proven gas reserves amount to 4.4 trln cubic metres, with the main source of reserves located underground in central China’s Sichuan province and in the Xinjiang Uyghur Autonomous Region in the north-west of the country.

Diesel fuel. The production of diesel fuel in 2013 amounted to 172.3 mln tonnes, which was an increase of 1% compared to 2012.

Petrol. The production of petrol in 2013 amounted to 98.2 mln tonnes, which was an increase of 10.1% compared to 2012.

Kerosene. The production of kerosene in 2013 amounted to 25.2 mln tonnes, which was an increase of 18.2% compared to 2012.

Ferrous metals. The production of ferrous metals in 2013 amounted to 1,067.3 mln tonnes, which was 11.8% higher than in 2012. Steel prices, which were in the range of USD 510-USD 570 a tonne (down USD 20-USD 40 compared to 2012) during the first half of 2013, stabilized in the second half of the year between USD 525 and USD 540 (at 2012 levels).

Non-ferrous metals. China’s production of non-ferrous metals in 2013 amounted to 139 mln tonnes, which was 18.1% higher than in 2012. Reserves of manganese, chromium, vanadium and titanium ore amount to 433 mln tonnes, which should supply the domestic market for 11 years (if production remains at 40 mln tonnes, as in 2013).

Cement. Cement production in 2013 totalled 2,404.2 mln tonnes, an increase of 9.6% over 2012.

Fertilizers. Fertilizer production in 2013 amounted to 190.2 mln tonnes, which was 8.4% higher than in 2012.

Chemicals. Chemical production in 2013 totalled 306.2 mln tonnes, which was an increase of 7.2% over 2012.

Production of rolling stock for the Strategic Partnership 1520
In February 2014, factories in the CIS produced 5,600 railway cars, which was a decrease of 25% compared to February 2013. Along with this reduction in production, the prices of the main types of rolling stock continued to decline. Russian manufacturers built 4,900 railway cars, which was an increase of 10.5% year-on-year. Ukrainian manufacturers built 600 railway cars, which was one-quarter the number produced in February 2013. The prices of gondola cars, platforms, hoppers and oil and petrol tank cars continue to decrease and are at practically the same level, in the range of USD 42,000-USD 52,000 per unit.

Gondola cars. In February 2014, more than 2,800 gondola cars were built, which was 13% lower than production in February 2013. Kazakhstan VSZ and UVZ reduced their production of gondola cars. The prices of gondola cars were in the range of USD 42,000-USD 49,000.

Oil and petrol tank cars. In February 2014, about 900 oil tank cars were produced (a decrease of one-third compared to February 2013). Ukrainian factories ceased production of tanks for petroleum products. The prices of oil and petrol tank cars were in the range of USD 50,000-USD 53,000 per unit, which was 25% lower than in February 2013.

Hoppers. In February 2014, 900 hoppers were built (a decrease of one-third compared to February 2013), of which 400 units were grain hoppers, 200 were mineral hoppers, 200 were ballast hoppers and 100 were cement hoppers. Prices for grain hoppers were in the range of USD 50,000-USD 51,000, which was 25% lower than in February 2013. Prices for mineral hoppers were in the range of USD 49,000-USD 50,000 per unit, and prices for cement hoppers were USD 48,000-USD 50,000 per unit.

Boxcars. In February 2014, 230 boxcars were built (half as many as in February 2013). Prices for boxcars were in the range of USD 58,000-USD 63,000 per unit.

Gas tank cars. In February 2014, 300 units of gas tank cars were built (a decrease of 58% compared to February 2013). In February, prices for this type of rolling stock were in the range of USD 61,000-USD 68,000 per unit.

Platforms. In February 2014, 200 container platforms were built, which was an increase of 57% over February 2013, and around 200 universal platforms were built (2.5 times more than in February 2013). In February 2014, prices for various types of platforms were in the range of USD 49,000-USD 53,000 per unit.

Railcar production data was provided by the information service “Rolling stock market”.

Russian railcar operating leasing market
In February of this year, rates for gondola cars, in roubles, were 500-550 a day, which, in dollar terms, is USD 14-USD 16 a day. The rates for all other types of rolling stock decreased compared to January 2014.

In February 2014, the daily rates for boxcars dropped to USD 26. The daily rates for universal and container platforms decreased to USD 21 and USD 24, respectively. The rate for mineral hoppers was USD 20 a day. The rates for grain hoppers and cement hoppers were USD 21. The daily rates for oil and petrol tank cars decreased and were in the range of USD 24-USD 27. The rates for gas tank cars fell to USD 35.

The current state of Russia’s railcar fleet
As a result of an increase in the average transport distance and the lack of growth in transport volumes in February 2014, the size of the idle fleet increased to 250,000 units, which is more than 20% of the total fleet. According to our estimates, there were 120,000-130,000 surplus cars in February 2014.

The empty run ratio decreased from 85% in January 2014, reaching 78% in February 2014.

The rate of movement of the active fleet exceeded 300 km/day at the beginning of 2014 due to the efficient use of the fleet, reaching 321 km/day in February 2014. The average monthly distance travelled per railcar is a little more than 4,500 km.

Age structure of the fleet in the Baltic countries
The fleet of railcars in the Baltic countries comprises 41,700 units with an average age of 17.5 years. The fleet has a large share of oil and petrol tank cars (41%) and boxcars (12%). Upgrades to the rolling stock carried out over the past 10 years have involved all types of railcars.

Gondolas. Estonian, Latvian and Lithuanian operators own 6,600 gondola cars, 3,200 of which (49% of the fleet) have had their service life extended. Another approximately 800 units (13%) will reach the end of their standard service life in the next five years. The average age of the gondola fleet is around 19 years.

Oil and petrol tank cars. The Baltic fleet of oil and petrol tank cars has been significantly upgraded and comprises 17,200 units. Some 2,000 cars (12%) have had their service life extended. Another 1,000 cars (6%) will reach the end of their service life in the next five years. The average age of the fleet of oil and petrol tank cars is 15 years.

Gas tank cars. The Baltic fleet of gas tank cars consists of 1,000 units. Thirty-five units (3.5%) of this type of rolling stock will reach the end of their service life in the next five years. The average age of the gas tank cars is 16 years.

Platforms. The fleet of container platforms consists of 3,700 units, 700 of which (18%) have had their service life extended. Four hundred more container platforms (11%) are awaiting write-off in the next five years.

The fleet of universal platforms consists of 1,100 units, 300 of which (24%) have had their service life extended. One hundred platforms (12%) will reach the end of their service life in the next five years. The average age of the container platforms is 17 years, while that of the universal platforms is 19 years.

Boxcars. The fleet of boxcars consists of 5,000 units, 1,900 of which (39%) have exceeded their service life. Another 700 boxcars (13%) will reach the end of their service life within the next five years. The average age of the Baltic boxcar fleet is 23 years.

Hoppers. The hopper fleet consists of 5,000 units, including 2,600 grain hoppers, 1,600 cement hoppers, and 800 mineral hoppers. Some 400 grain hoppers (14%), 500 cement hoppers (31%) and 100 mineral hoppers (13%) have had their service life extended. Another 1,000 grain hoppers (41%), 400 cement hoppers (27%) and 100 mineral hoppers (13%) will reach the end of their standard service life in the next five years. The average age of the grain hoppers is 22 years, while that of the cement hoppers is 20 years and that of the mineral hoppers is 13 years.

Other specialized cars. The fleet of other specialized rolling stock consists of 2,300 units and has an average age of 18 years. One hundred railcars (6%) have had their service life extended. In the next five years, a further 700 railcars (29%) will reach the end of their service life.