Photo from transport-journal.com
Production of freight cars in Russia is slumping.
Russia's Transport Ministry is discussing the issue of banning imports of Ukrainian-made railway wheels to the territory of the Russian Federation.
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"According to the sources, the final decision will be made by the Russian government. The ban is planned to be introduced before the end of 2020. At the same time, barriers with regard to Ukrainian [railway] wheels are already in force in Russia," the publication said.
Today, the Russian market sees a surplus of railway wheels. Demand for them started declining in the fourth quarter of 2019.
Since the end of 2019, JSC Russian Railways has recorded an increase in the number of railroad cars that are temporarily not used. At that time, there were more than 100,000 such cars, which accounted for about 10% of the total rolling stock.
Meanwhile, against the background of decline in transportation, including due to the coronavirus pandemic, the production of freight cars in Russia is slumping. Thus, according to Russia's Institute for Natural Monopolies Research, if the current conditions remain unchanged, the surplus of railway wheels on the Russian market in 2020-2021 will account for 23%-31% of the supply (439,000-661,000 units).
According to CEO of INFOLine-Analytics Mikhail Burmistrov, under the current conditions, Russian producers are able to fully meet the needs of the domestic market. However, the shutting down of the market for Ukrainian wheels may trigger the relevant price hikes.
Annual capacities of two Russian wheel manufacturers, namely the United Metallurgical Company and Evraz, are estimated at 850,000 and 450,000 units, respectively. At the same time, in 2019, Ukrainian oligarch Victor Pinchuk's Interpipe supplied 223,000 wheels to the Russian market.
In June 2020, the Eurasian Economic Commission reinstated the duty on Ukrainian-made railway wheels.