Iron logic

Russia seeks new distribution areas for export of the metal. It is especially significant now, when the demand on metal falls. In this context the development of the Caspian transport gate to Iran and India becomes especially important, behind which there are some geopolitical implications associated with the tension over Iran nuclear program. Here Russia places bets on the development of the port of Olya, which should gradually take over some cargo from the port of Astrakhan.

Opening a new gate

Port facilities available at the Russian part of Caspian coast clearly do not cope with the growing freight traffic. The possibilities of development of the port of Astrakhan are restricted by urban quarters. That is why new port Olya could be a good alternative for the construction of marine terminals in this direction. By 2010 freight traffic of port of Olga could reach 1 million tons due to operations with metals and building materials.

Among the advantages of the port of Olya there is the maximum proximity to the Caspian Sea, large vacant spaces, infinite possibilities of development of port capacities, the introduction of modern intensive technology of goods processing, engineering and transportation services. In addition, district village of Olga practically does not face danger of alleged rise of the Caspian Sea and floods, which makes possible the safe development of infrastructure.
 
Turnover of the port of Olya in January-April 2010 made up 259.6 thousand tons, 17% higher than in the accounting period last year.

According to forecasts Rosmorport FSUE, by 2020 10 million tones will be handled at the port of Olya per year. Gradually, it will take over the cargo handled at terminals in Astrakhan (about 3.5-5m tons) - 250-300 hectares of the port area is a good guarantee of such development. In addition, another neighboring Russian port of Makhachkala will developed in collaboration with port of Olya.
Noteworthy, the port of Olya is currently closed for international navigation, border crossings points and customs offices operate in it. Press service of Rosmorport reports, every year foreign trade goods heading through the Caspian Sea to Iran, Turkmen, Kazakh and Indian areas, are handled here.

Olya was designed and established as one of the projects of importance concerning trade with the Republic of Iran. As explained by Director General of Federal State Unitary Enterprise "Rosmorport," Iran is the biggest consumer of Russian steel, Igor Rusu, CEO of Rosmorport explains. “Iran is the biggest consumer of Russian steel. Subproducts are the most popular steel products in Iran, to its share fall more than 50% of Russian exports of steel.

For transshipment of dry cargoes, in particular, iron of Novolipetsk Steel Factory, the first commercial seaport district is under construction, which is located on the river Bakhtemir and directly adjacent from the south to Olya (Astrakhan oblast, Limanskii region). Volga-Caspian canal linking the Volga and the Caspian Sea passes through the river Bakhtemir. Cargo region lies within 88 km from Astrakhan. Canal dimension between cargo area and sea makes up100 kilometers at the present context.

Cargo area disposes of 15 berths, including: 12 – freight docks and 3 – intended for port and additional fleet. Basically, all the berths are located frontally along the coastline. Three of the berths - № 5a, 10, 10b - located in ladle of the base at port- fleet. Construction of waterfront is designed on both sides of the existing berths № 1, 2, 3 on the shore station from the village of Olga to the Caspian channel.

The Role of Rosmorport FSUE in the implementation of the project lies in the preparation of critical infrastructure objects. Among them there are waterworks, systems of navigation safety, etc. In addition, Rosmorport provides in the port Olya pilotage and other services, without which the operation of the port would be impossible", - Igor Rusu says.

The establishment of expanded port infrastructure in the prospect will become one of the advantages of the port of Olya in comparison with ports operation in the Caspian Sea

Approved income

Freight traffic of Russian steel from Rostov to Iran grows and implies geopolitics, concerning the sanctions employed with regard to this country. Albert Vigovsky, CEO of Volga Baltic Logistic LLC reported to PortNews IAA, the reason for such growth is the further escalation of tension around Iran and around its nuclear program. The largest margin in sales of metal at the present moment exists for many traders at market of Iran. Such transfers are usually carried out alongside with cargo transshipment on sea vessels at the ports of Caspian Sea (Astrakhan, Olya, Makchachkala), expert is quoted as saying.

According to him, in the opposite direction - from the Caspian to the Volga – traffic flow of scrap metal grows. This cargo is mostly transferred from Kazakhstan through Russian inland waterways in the direction of the Black Sea and further - to Turkey. For the transfer of scrap metal vessels of river-sea type are commonly used ".
 
As Ragulina Sophia, Senior Analyst of  UK" Everest Asset Management told to PortNews IAA, the demand for the metal in the world market started to fall since the beginning of May 2010. Decline in steel prices in China in mid-April associated with China Government adopting measures to curb the property market made a definite contribution contributed to this. "Summer is traditionally characterized by low demand for the metal, and growth can be expected not earlier than this autumn", - expert predicts.

In her opinion, steelmakers faces difficulties to shift the growth of raw material to final product. This is especially important in the decline of prices for steel - a process, which was launched in China, is now being distributed in other countries. "Producers and consumers of Russian steel decided to take wait-and-see approach, the volume of steel trade - at a low level. Low export prices for steel from $ 715 / t to $ 650 / t do not change fundamentally the situation: there is no demand. Consumers use steel from previously established reserves. Traders are ready to reduce prices further, individual proposals - at a price almost $ 200 / m below "- Sophia Ragulina explained.

Nadezhda Malisheva, Vitaly Chernov