Фрахтовый рынок Азовского и Каспийского моря. Неделя 26 2020

Azov and Caspian Freight Market, Week 26, 2020

  • During the week 26, the Sea of Azov market did not show significant changes. Freight rates increased by an average of $1, which can be explained by the pressure in waiting for the upcoming grain season. According to Glogos Project, many charterers were trying to fix spot positions as quick as possible time in order to protect themselves from the sharp spike in rates. Amid this, owners have managed to balance the market, and in some cases, turned it to their advantage. However, there are still few spot shipments, and the tonnage supply exceeds its demand; still, owners are already flatly refusing to work at the minimum rates in order not to miss the long-awaited market growth.

    Traders think that activity will resume starting from the 27th week. According to market insiders, a new crop of barley should appear in the ports by this time; also, firm negotiations on wheat are expected to begin. At the same time, many traders agree that no significant market changes are expected until mid-July. However, owners are trying to fix only spot positions, holding their prompt fleet in case of sharp jumps in freight.

    At the beginning of the new season, grain is traded at a very large price range. Strong fluctuations are explained by the news reports and forecasts of the upcoming harvest in the main grain producing countries. Thus, in Europe, the yield forecast has been declining for several weeks in a row. In Russia, on the one side, the forecast for winter barley is lowered weekly due to the lack of precipitation; at the same time, the forecast for wheat and other later crops is raised. Amidst such uncertainty, very few long-term contracts are signed, which generally hinders the growth of rates.

    During the reporting week, there have appeared spot offers from charterers with the actual date of documents issuance on July 1. This allowed shippers to exclude the loaded volume from the quota and, at the same time, to fix vessels at a low rate. Such offers, even considering the risks of fleet idleness, were in demand from owners’ side, this once again indicates the lack of cargo in the market.

    According to Glogos Project, on week 26, 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.

    The transit market has been under a downward pressure in the recent weeks. Compared to the beginning of the navigation season, the demand for transit fleet fell, as the largest part of urgent cargo was shipped, so charterers began to take a more careful approach to the choice of vessels. This was the reason of rates declining, both towards the Caspian Sea and in the backhaul direction.

    An additional impact was the fact that the main part of transit cargo towards the Caspian is intended for the port of Turkmenbashi, which caused a congestion there. Voyages in the backhaul direction often start from Bekdash, where there are also large queues due to a significant congestion of vessels. Charterers have almost no opportunity to work on the spot market to avoid heavy demurrages. Thus, by reducing freight rates, they try to reduce their losses.

    Freight rates for 3,000 dwt vessels for barley to Iran made $18 pmt from Astrakhan, $12 from Aktau and $14 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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