WHILE THE BEAR WAS BOOMING
By John Helmer in Moscow
The Russian Federation’s decade of rampant economic growth has been a boon to maritime activity and ports on the Black Sea. But the good times are coming to an end, writes John Helmer
Russia has been aiming to develop dry cargo movements, both export and import, as the preferred direction for Russian oil exports shifts eastward towards China, and from Arctic oilfields in the north westwards into northern Europe. Of course, that was before the global financial crisis intensified earlier in the autumn.
But the signs of trouble were there to be seen as early as July. Container volumes into Novorossiysk, Russia’s leading Black Sea outlet, had been booming on the back of growth in Russian incomes and consumer demand – up 42% in the first five months of the year, compared to 2007. By July, however, the turndown was already on the horizon. Novorossiysk reported for the month that container volume had slipped 10%, compared to June, and by 33% compared to July 2007. Reefer volumes fell in parallel by 84% and 63%, respectively. Steel, scrap, sugar, timber, and non-ferrous metals also fell sharply in the month, compared to the same period of last year. Crude oil, the mainstay of Novorossiysk, remained flat, both June to July and year-on-year.
The gloom had also started to descend on the Azov Sea ports, as the export of steel, aluminium, copper, and scrap began to suffer from falling global prices and falling export demand. In their place, there was the Turkish cement boom, which began in January this year, after Moscow had eliminated the import duty and encouraged Turkish imports to supply the burgeoning demand, especially in southwest Russia, along the Black Sea coast, for construction materials. Import volumes of mineral construction materials (MCM) also skyrocketed. Reports from the regional North Caucasus Railroad indicate a 30% jump in MCM tonnage transported, compared to the first half of 2007. Cement more than doubled to about 1.5M tonnes in the same period.
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