15 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
The decline in the freight market has so far stopped in the Azov and Black seas region. There are very few open spot vessels. This situation is explained by the fact that shippers are eager to “pawn off” the remaining goods due to a decrease in the price of raw materials: with the occurrence of the new grain harvest on the market, the price level is unlikely to meet expectations for USD 250 + FOB Black Sea for 12.5% wheat. Shippers of goods not fitting under quota and duty are quite active. Therefore there are expected no rates below USD 15 per ton for voyages from Rostov to the Black Sea in the near future.
Voyages to uncommon destinations are gaining popularity. The fact is that producers and Traders are finding other markets as an alternative to exporting to Turkey in a bid to get rid of expensive old stocks. From the Azov Sea ports, grain parcels are shipped to Ghent, Libya and Tunisia; this makes the tonnage, which is capable of performing such voyages, quite valuable. The rates for these destinations are currently noticeably higher than for comparable, but familiar routes.
Will the freight rate level be the same as before? Today, the Black Sea coasters market is still high. Owners offer rates of around average 10s for backhaul cargo from Turkey to Georgia/Ukraine. Though shippers, who have been forced to pay high freight for quite a long time, are now negotiating more discreetly in a bid to get very low 10s. The current level has not yet been determined, and the pace of shipments has decreased. Nevertheless, the position of Owners looks stronger, as far as there is enough alternative work in the region now.
Continuous congestion at Israel ports is aggravated by lack of the actual berths for different commodities and lack of the manpower to facilitate timely loading/discharging operations, which followed the March’s notable increase of cargo flow. In attempts to mitigate the situation disbursement discount for the extra waiting time was provided by the port authorities. Even so Owners have no willing to call Israel ports without extra freight premium, which in some cases amounted to 20%. The waiting time varies from 13 to 21 days and still a substantial number of vessels awaiting at anchorage. The situation may improve by the end of the May.
According to Middle East Charterers who ship steel products, a dire need for spot Handy-size vessels at Arabian Gulf persists. High demand started at the beginning of the April. Charterers complains that spot vessels supply is very low at the moment and most of the vessel that sailing towards Arabian Gulf already fixed for the next voyages. This situation arises from the fact that Owners prefer to position their fleet in Pacific basin for employment on Far East – ECI route and vice versa, as currently this region offers appealing rates and stable amount of cargo orders. Therefore, Persian Gulf is out of the picture and Charterers face a choice between securing a spot vessel on Owners’ terms and pay extra freight or moving laycan significantly.