A dark cloud is hovering over the Azov freight market: there is observed a drop in freight rates, a decrease in the volume of cargo for export and an increase in open tonnage. During the reporting week, the rate for voyage from Rostov to Marmara was about USD 20 or less per ton. There is virtually no grain cargo on the market, which is covered by the quota and duty. Those Charterers who considered the rates at the level of the low 20s for the voyage to Marmara at the beginning of the week, offer no more than USD 20 at the end of the week. Large market participants who are still making shipments at roads transshipment are trying to provide work for their own fleet. Owners of Russian-flagged vessels are focusing on transit voyages, while others concentrate on backhaul cargo. However, Owners are trying to play for time in every possible way. By the end of March, rates are expected to fall to the high 10s for the voyage to Marmara.
Based on the results of the Egyptian tender for grain purchase, the question arises about the future prospects of such high coasters market in the Black Sea. Most shipments will be made from Romania and America. The prices of Russia and Ukraine were beyond competition. Of course, Owners will continue to insist on high-market rates. But whether Traders and shippers will be ready to match and pay at such high rates remains to be seen. Two factors play against this: a significant number of imports go through tender purchases, and the sentiment of lower prices and loss of profit will apply pressure. Even if the market level remains high, Traders will by all means try to delay the negotiations and try to get the lower freight rate.
Working in transit via inland waterways is a possible alternative for Owners of Russian-flagged vessels. Even now, large freight forwarders are negotiating with Owners for voyages with general cargo to the Caspian Sea; a number of vessels have already been fixed. The rates for the current period are lower than last year due to the lack of grain on the market not only for export transportation, but also for cabotage voyages at roads transshipment. The average indicative rate for a voyage from Marmara to the Caspian Sea port is USD 120/130k per vessel with a deadweight of 3000 tons with no age restrictions. There are virtually no firm negotiations on export voyages with grain. Until the beginning of July, grain exports are not expected to increase. Though, there is expected a high demand for tonnage for cabotage voyages via inland waterways: the domestic market will try to make grain crop stocks from the 2021 harvest for further export shipments.