In 2016, transshipment of Russia’s foreign trade cargo via the foreign ports of the Baltics and Ukraine decreased by a quarter to 47.2 mln t, which is 6.5% of the total throughput of Russian ports and 6.1% of Russian foreign trade cargo transshipped via seaports. However, Russia is still dependent on foreign Baltic terminals when it comes to certain types of cargo.
Not by liquid bulk alone …
The goal of the Strategy for the Development of Russia’s Port Infrastructure developed in 2012 is to reduce the share of the Baltic and Ukrainian ports in total transshipment of Russia’s foreign trade cargo to 5% and below. This goal is likely to be achieved this year but it would hardly happen if not for well known geopolitical events, especially those in Ukraine which saw the reduction of cargo transshipment by 48% to 4.7 mln t. Transshipment via the ports of the Baltic states reduced by 20% to about 42.5 mln t.
In Ukraine, the reduction was seen in transshipment of all types of cargo. The greatest fall was registered in transshipment of ferrous metal (-86%), the least – in transportation of coal (-27%). Most of Russian cargoes were handled at Yuzhny port. It should be noted that the Southern Basin of Russia lacks bulk cargo transshipment facilities. In the future it is supposed to be covered by a dry cargo area which under development at the port of Taman. When this project is completed, dependence on Ukrainian ports can come to nothing.
As for the Baltic ports, oil cargo makes the bulk of volumes shifted to the ports of Russia. Transshipment of oil cargo has reduced by almost a half there to 10 mln t. This year is to see further reduction. In particular, Transneft forecasts the reduction of diesel fuel pumping to the ports of the Baltic states by 25% to 2.4 mln t. The impact on the Latvian port of Ventspils and the Estonian port of Maardu is the highest.
The situation of dry cargo transshipment is more complicated. As for coal transshipment, the second largest sector after oil when it comes to the Baltic ports, its volumes fell by 13% to 16.4 mln t. The bulk of it is handled at the port of Riga. Transshipment via the port of Ventspils has plunged while the port’s dedicated terminal, Baltic Coal Terminal that used to handle Russian coal, had almost no load in 2016. However, there are not enough coal transshipment facilities at the Baltic ports of Russia so far to take over all coal from the foreign ports. Even the project on expansion of the Port Vysotsky terminal up to 12 mln t per year is not enough if coal exports are as high as today.
The third type of cargo (in terms of volume) exported from Russia via the Baltics is mineral fertilizers. The situation is even more challenging here. In 2016, transshipment of mineral fertilizers via the Baltics increased by 7.8% to 7.4 mln t. This is because of absence of dedicated terminals in the Baltic Basin of Russia. The business shows no intention to invest in construction of new terminals from scratch. In late 2016 there were speculations about “instructions” given to Acron to stop transshipment of mineral fertilizers via the Estonian terminals. In our opinion, such instructions, if there are such, are hardly economically reasonable. The construction of a dedicated dry cargo terminal in Russia, let’s say in Ust-Luga, is estimated at minimum RUB 6 bln. If annual cargo transshipment is below 4 mln t the construction of a terminal from scratch is hardly profitable. EuroChem was earlier going to build a terminal of mineral fertilizers in Ust-Luga, but the things aren’t moving.
So Russian dry bulk cargo is not likely to leave the Baltic ports following oil cargo. As for mineral fertilizers, Russia is still dependent on foreign ports which handle about one third of their total volume.