12 week: Russian River, Azov / Black Sea, Caspian; Coaster shipments

12 week: Russian River, Azov / Black Sea, Caspian; Coaster shipments

Freight rates on 12th week remain steady on the level of last week and maintain 36 $ per ton basis voyage ex Rostov to Marmara with wheat. Market participants consider the possibility of freight level adjustment in the short run.

During the whole March, the Charterers actively tried to ship barley to Turkey on preferential terms (Zero tax until 1 April), therefore practically all the spot tonnage was chartered for these needs. Presently the situation in the Azov basin shows many vessels will be open at about the same time – at the beginning of April. This will lead to tonnage oversupply in the region on 13th week. The Shipowners are ready to fix at current rates, while on the contrary most Charterers are trying to postpone negotiations and wait until a large number of ships are in the spot at the same time, and rates will take a course to decline.

According to Turkish Traders, current lira / USD ratio is unfavorable and declining even more, which effectively reduce import ability of Turkish buyers if negative expectations regarding lira come true major part of Turkish buying program shall be put on hold. Such dramatic reduction of business activity shall undoubtfuly drop Azov market rates to the bottom.

Caspian region reports severe freight decline during previous week – down to 39 USD pmt basis  Astrakhan – Iran with wheat, which is 5 USD lower than on 11th week. Market participants consider all-out lack of cargo as sole reason for such notable change. Moreover substantial volumes of barley have been delivered to Iranian buyers via railway which were favored over sea-river vessels due to recent tariffs adjustments for grain transportations by Russian authorities. As Traders say, such competitive railway policy renders current freight rates economically senseless.

According to the official information from Russian River Authorities, navigation – 2018 shall been introduced in the Volga-Don basin in April as follows:

01.04 – 03.04 – the Volgograd’s locks,

07.04 – 10.04 – the Balakovskiy’s locks,

22.04 – 24.04 – the Samara’s locks.

The river elevators of the Volgograd and Saratov regions starting to accumulate volumes to prepare for the opening of navigation and start shipping grain to Iran as early as possible. Owners of Russian-flagged vessels are being keen on negotiating voyages ex river ports for some time now. Recent Caspian market decline has undermined their activity as it is difficult to predict what freight level will be workable upon navigation start and actual voyages will be performed. As of 12 week, Charterers commonly opened negotiations with idea 43-45 $ for voyages with barley ex Volgograd to Iran.