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Reuters
23-05-2025
- Business
- Reuters
Exclusive: Russia's major exporters cut rail cargo volumes as economy slows, document shows
May 23 (Reuters) - Major Russian exporters including Rusal and Gazpromneft have cut the planned volume of commodities like metal and oil products they send by rail, a Russian Railways document seen by Reuters showed, the latest sign of subdued demand as the country's war economy slows. The state-owned rail monopoly intends to reduce 2025 spending by an additional 32.5 billion roubles ($408 million), or around 3.5%, to 858.4 billion roubles, due to the revised cargo forecast, according to the document dated March 20. It had already planned to spend 40% less on investment this year than in 2024 in the face of soaring interest payment costs. Russian Railways declined to comment. Its cargo volumes, which hit a 15-year low in 2024, are a useful gauge of the manufacturing health of Russia's export-driven economy. The document Reuters reviewed anticipates Russian Railways will transport 36.7 million metric tons less than the 1.24 billion tons initially projected for 2025. It named a dozen major companies contributing to reduced rail shipment volumes, including aluminium giant Rusal ( opens new tab and steelmakers Severstal ( opens new tab and MMK. Although total cargo volumes this year are still expected to be slightly higher than the 1.18 billion tons in 2024, they have fallen 6.8% year-on-year in the January to April period, according to data on its website. In the document, a presentation to Russian Railways' board from First Deputy CEO Vadim Mikhaylov, the company said its investment plan can be adjusted in exceptional circumstances and listed five main reasons to reduce spending, blaming factors outside its control. Tight monetary policy, with the Bank of Russia's key interest rate at 21% since October, has slowed the pace of construction, the document said. High rates have also led steel producers to reduce loading volumes, it said, naming Severstal, MMK, TMK ( opens new tab, NLMK and Evraz (EVRE.L), opens new tab among companies contributing to reduced cargo volumes. TMK declined to comment. Evraz, MMK, NLMK and Severstal did not immediately respond to requests for comment. Russia's iron and steel industry, which contributes nearly 5% to the country's GDP, has seen export revenues plunge since losing access to high-margin markets because of Western sanctions, according to a report by Moscow-based consultancy Yakov and Partners. Steel production, exports and local demand dropped in 2024, according to the World Steel Association. Production has continued to drop this year, according to analytical firm Chermet Corporation. Russian Railways highlighted in the document reduced demand in other sectors, such as from aluminium giant Rusal. Rusal said it was sticking to plans announced in November, without giving further details. Those plans include cutting annual aluminium output by 250,000 tons due to rising alumina prices. The document named increased sanctions on metal, forestry and oil companies - Gazpromneft ( opens new tab, Surgutneftegaz ( opens new tab and Tatneft ( opens new tab - as a negative factor. Those three companies did not respond to requests for comment. Reduced exports of wood, fertiliser, metals and oil products to China have also hurt cargo volumes, the document showed. Trade turnover between Russia and China is down 7.5% since the start of the year. The document also blamed "the interference of third parties mainly in relation to oil refineries", a tacit reference to Ukrainian drone strikes on Russian energy facilities. ($1 = 79.6705 roubles)
Reuters
21-03-2025
- Business
- Reuters
Russia ships its Arctic oil to Syria for first time as sanctions limit buyers
MOSCOW, March 21 (Reuters) - Two tankers hit by U.S. sanctions are due to offload Russian Arctic Oil in Syria for the first time, days after Moscow made its first known delivery of diesel there in more than a decade, according to LSEG data, a government source and local TV. One of the tankers, Aquatica, with some 100,000 tons of Russian oil onboard, is set to offload in Baniyas port soon, according to a government source and pro-government Syria TV. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. The vessel arrived on Thursday, but has yet to offload, according to the TV report and the government source. The second tanker, Sakina, is still on its way to Baniyas with another 100,000 tons of oil, LSEG data showed, and was set to arrive on March 25. Both vessels are subject to the U.S. sanctions imposed on January 10, as is the Umba storage tanker near the northern port of Murmansk where both vessels loaded the volumes in February, according to shipping data seen by sources. Russia has to look for alternative buyers of its Arctic oil since the U.S. sanctions in January hit producer Gazprom neft and the tankers shipping the crude. Syria is struggling to find a replacement for Iranian oil for its refineries, as it struggles with its own oil output. Syria's Baniyas refinery, the largest in the country, halted operations in December 2024 amid shortages following the suspension of Iranian supplies. Russia's Gazprom neft and Syrian oil ministry official did not respond to requests for comment. Russia shipped a diesel cargo to Syria onboard a tanker under U.S. sanctions early in March.
