Russia bans 150 railcars containing Ukrainian casting

Russia’s Transportation Supervisory Service stopped using 150 freight railcars containing casting parts made by Ukraine’s AzovElektrostal (56 units) and Kremenchuk Casting (94 units). The authority blamed three accidents between January 21 and 30 on defects in Ukraine-made side frames manufactured in 2010 and 2011. The ban affects all wagons equipped with similar side frames.

Roman Dmytrenko: The news has potentially negative implications for Ukrainian railcar producers Kryukiv Wagon (KVBZ UK) and Stakhaniv Wagon (SVGZ UK). The two casting suppliers whose products were effected by the ban are responsible for 56% of casting parts for CIS railcar producers and for over 95% of Ukrainian supplies. In addition, the three accidents raise the risk of a new suspension in quality certificates for Ukrainian casting producers (similar to what happened in October 2011), and calls into question the output targets of Ukrainian and Russian wagon makers for this year.