**Russia’s Top Exporters Slash Rail Shipments Amid Economic Slowdown**
In a sign of weakening demand and a slowdown in the war-driven economy, major Russian exporters are cutting back on shipments of metals and oil products by rail. The move has prompted Russian Railways to slash spending by an additional 32.5 billion rubles ($408 million), bringing its planned investment for 2025 down to 858.4 billion rubles – a decrease of about 3.5% from earlier projections.
According to a document seen by Reuters, firms such as Rusal and Gazpromneft plan to reduce the volumes they intend to move by rail in 2025. This has led Russian Railways to reevaluate its spending plans, citing rising interest payment costs as one of the reasons for the cuts. The state rail monopoly had already planned to reduce investment this year by 40% compared to 2024.
The cargo volumes, which fell to a 15-year low in 2024, serve as a key indicator of the overall health of Russia’s export-driven manufacturing sector. Russian Railways expects to transport 36.7 million metric tons less than previously projected in 2025, although full-year volume is still expected to exceed 2024’s total.
**High Rates and Sanctions Weigh on Sector**
Among the companies scaling back shipments are aluminium producer Rusal, steel manufacturers Severstal, MMK, TMK, NLMK, and Evraz. Tight monetary policy has compounded the sector’s challenges, with high interest rates dampening construction activity and hitting demand for steel.
The Bank of Russia has kept its key interest rate at 21% since October, which has led to a decline in steel production, exports, and local demand. Sanctions against metals, forestry, and oil companies like Gazpromneft, Surgutneftegaz, and Tatneft are also weighing on rail cargo.
**Trade Turnover with China Drops**
Exports of wood, fertilizer, and metals to China have dropped, with overall trade turnover between the two countries down 7.5% this year. The document notes that “the interference of third parties mainly in relation to oil refineries” – a veiled reference to Ukrainian drone attacks – has further disrupted shipments.
The revised cargo forecast reflects a significant slowdown in Russia’s economy, which is heavily reliant on exports. As the global economy continues to navigate uncertain times, it remains to be seen how Russia’s top exporters will adapt to these changing circumstances and what impact this will have on the country’s overall economic performance.
Read More @ kyivindependent.com
