Фрахтовый рынок Азовского и Каспийского моря. Неделя 20 2020

Azov and Caspian Freight Market, Week 2020

  • The Black Sea coaster market still was down in the dumps and has not experienced any significant changes during the week 20. Demand for vessels remained extremely weak; at the same time, a large amount of spot tonnage congested in the Sea of Azov, which pulled the rates down in the neighboring regions as well. Observations suggest that part of the fleet is switching to the Continent due to the current situation, which is also adds pressure upon the market, Glogos Project reports.

    According to experts, business activity will continue to decline over the next two weeks, as far as Turkey, which is one of the main grain importers, goes for long holidays. On May 19, the country celebrates Ataturk Day, and on May 23, the end of Ramadan. Turkish companies will work only three days on the 21st week due to the holidays; and they will almost completely miss the 22nd eek.

    Some owners preferred to leave their fleet at berths and not to fix it in the face of the negative voyage economics. Other owners try to reduce losses by agreeing to any rates, which leads to chaos in the Black Sea and Mediterranean markets. Even large grain exporters who have their own fleet are now looking for cargo in the market, as far as their vessels were left without work after the fulfillment of the quota. The current situation will continue at least until the new grain crop will come into the market in July.

    Market analysts give a mixed assessment of the results of the quota. According to some of them, the main beneficiary of this situation was VTB Group and its grain holding. By introducing this quota, the state supported “its” trader, since the real efficiency indicators of the new holding were far from the target ones. As a matter of fact, after the quota introduction, domestic wheat prices increased dramatically, and the number of possible exporters decreased just as sharply; this created favorable conditions for large traders to dictate their terms. During the reporting week, there were widespread rumors among market insiders that the quota could be extended until the end of the summer; this again would play into the hands of major players

    While most of the fleet in the Azov region continues to stay idle without work, Russian-flagged vessels are actively deployed making transit voyages from the Black Sea to the Caspian and in the backhaul direction. The rates for such voyages have decreased slightly since the navigation start, but still remain at a level that allows owners to maintain the profitability of their business.

    The main reason for this situation is considered to be high competition for vessels among charterers due to difficulties in crossing land borders, which is reinforced by high demand for Turkmen fertilizers on foreign markets. According to key market players, even if the freight levels for transit voyages are further reduced, they can still remain profitable for owners for a rather long time due to the fact that there is no ballast passage, as well as no dividing of voyages into “main” and “backhaul”.

    According to Glogos Project, on week 20, freight rates for 3,000-5,000 dwt vessels for wheat parcels to the Sea of Marmara made $14 pmt from Rostov and Azov, $13 pmt from Yeisk and Taganrog, and $12 from Temryuk.

    Freight rates for coal to the Sea of Marmara made $12 pmt from Rostov and Azov, $112 pmt from Yeisk and Taganrog, and $11 from Temryuk.

    Freight rates for 3,000 dwt vessels for barley to Iran made $25 pmt from Astrakhan, $17 from Aktau and $19 from Makhachkala.

    Please note that the rates cited in this article are average market rates. We ask our readers to pay attention that this information is not a commercial offer and cannot be an example for comparison in commercial disputes and arbitration.

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