14 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
After the official opening of the navigation on the 1st of April 2019, most of the vessels with the Russian flag began to work in transit to Iran from Azov ports and elevators of the Volga-don Canal to Iran in the absence of a fair number of general project cargo. Due to the increase in the number of tonnage in the region many market insiders predict the reduction of rates for Astrakhan and from river to Iran, so Charterers are in no hurry to fix the fleet on long-term dates.
At the same time Russian Exporters note a significant revival of the Iranian market upon completion of the holidays. Most in demand is barley, which is not much left in the Caspian region, and Traders are inventing new schemes for the transit of cargoes from ports of the Black Sea. The low season allows many of them to achieve favorable cargo offers, as well as favorable freight rates, therefore the demand for the transit fleet is high. However, many Owners remain wary of such voyages in view of the risk of getting on sanction lists, so they prefer to transit cargo to Kazakhstan, Azerbaijan and Turkmenistan, even at low rates.
Owners interested in voyages from river to the Black Sea, have difficulty with search of the cargoes: many of the elevators still have not begun operations; some of them are only starting to accumulate volumes. The highest activity is shown by Charterers that are planning shipments from the outermost river ports, such as Togliatti and Samara, but according to reports from local exporters, ice is still present partially on the river, so shipments from over there are planned only for the beginning of May. As a result, Owners of the Russian fleet, who don’t call Iranian ports, are continuing to make voyages from Azov ports amid hopes to find a profitable transit cargo from the Black Sea.
There were no significant changes in the Azov market in comparison with the last week. The workable rate for wheat from Rostov to Samsun is currently at USD 15 per ton for spot shipments. As a rule on falling market, most in demand are long-haul voyages: to make such deal is more easily at the present moment. Customary for the region, Owners are slow to react to the market decline, therefore they are trying to collect best offers and postpone firm negotiations and fixing till spot dates.
The difficult economic and political situation in Turkey has led to a decrease in the business activity of local Importers. It is expected that the firm interest for delivery of grain from the Turkish side will strengthen closer to the beginning of May. In view of this, during the stabilization of the situation in the Republic (March – early April 2019), shipments to Turkey fell almost by one half in comparison with the same period last year. Nevertheless currently the main reason for holding back of number of sales contracts is the growth of grain prices in the domestic market of the Russian Federation.