Фрахтовый рынок Азовского и Каспийского моря. Неделя 21 2020

Azov and Caspian Freight Market, Week 21, 2020

  • In the Sea pf Azov, the coasters market spent the 21st week in a relative silence. Freight rates fell by another $1, and a ton of bran could be shipped for $10 on the basis of the voyage from Yeisk to the Black Sea. According to Glogos Project, there are no positive changes, there is a lack of cargo observed; the fleet is working on the verge of profitability, many vessels are open in spot, and there is a tendency to a further increase of spot tonnage.

    Due to the holidays in Muslim countries, especially in Turkey, there is a noticeable decline in business activity; there are long queues of vessels waiting for loading and discharging at Turkish ports. Many companies that still have possibility to export, i.e. whose products aren’t subject to restrictions, have to wait until the holidays are over, as far as the buyers have taken a break and do not confirm any transactions: all the Turkish banks are closed, and it is difficult to pay for goods on time and get a permission to discharge.

    Experts note a decrease in the volumes of shipments from exporters of non-grain cargo. Due to the economic downfall and the subsequent drop in demand for finished products, manufacturing companies significantly reduced the volume of purchases of raw materials and energy supplies. Most traders think that the transportation of coal and metal continues at the level necessary only to keep production in working order. The situation is not expected to change until mid-summer, assuming that the quarantine restrictions will be lifted or at least eased, and stability and predictability will be restored in the banking sector. The latter is necessary to increase the volume of working capital of market participants.

    Many traders and owners are waiting for the new grain season; they expect to resume their activities with the new crop appearing in the grain market. This should favor the growth of the freight market. This growth, as well as the number of shipments from the Azov ports, will directly depend on how much Russian grain will be in demand from major market players working from deep sea ports. Russia and Ukraine are expected to be the main grain exporters in the Black Sea region in the new season. In Romania, a poor yield is predicted due to the drought.

    At the moment, the Volga region’s flour mills are experiencing a shortage of raw material supplies due to the fact that the purchase price for wheat is too high. It is expected that producers will not rush to dump the new crop, and exporting companies’ buyers will have to face fierce bidding. In case Russian grain wins any foreign tender with shipments from Taman or Novorossiysk, there may be expected new restrictive or regulatory measures for grain exports. For exporters working from the Azov ports, these concerns complicate the planning of their own export program.

    According to Glogos Project, on week 21, freight rates for 3,000-5,000 dwt vessels for wheat parcels to the Sea of Marmara made $13 pmt from Rostov and Azov, $12 pmt from Yeisk and Taganrog, and $11 from Temryuk.

    Freight rates for coal to the Sea of Marmara made $12 pmt from Rostov and Azov, $11 pmt from Yeisk and Taganrog, and $10 from Temryuk.

    In the Caspian region, the number of requests for inland transportation have rose; this may be explained by an increase in domestic purchasing prices for grain. Farmers clean their warehouses of the old crop and prepare elevators for the new harvest.

    Part of the coastal fleet will be laid up for a couple of months due to the very low freight market. Owners think that it is easier to stand idle or to go for unscheduled repairs than work at a loss.

    Freight rates for 3,000 dwt vessels for barley to Iran made $21 pmt from Astrakhan, $14 from Aktau and $16 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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