16 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
The leading role in the fleet disposition was played by the foul weather conditions in the Kerch Strait during the reporting week. The essential part of the fleet was idle waiting for passage about three days. This fact can now lead to delays in arrivals to ports of loading for the next voyages, as well as to congestion in the ports of discharge. Market insiders opine that this factor will not significantly influence the rates, because the amount of cargo orders remains in scarce supply, and the volume of spot tonnage has not been decreasing for several weeks. Some Charterers faced with vessels’ delays, and now they are urgently seek replacements in order to make shipment before the May holidays. Otherwise, they risk getting penalties due to non-compliance with the terms of shipments, because phytosanitary structures will be closed during the May holidays, and it will be problematic to issue the necessary documents.
Rates in the Azov Sea stopped to decline. The main driver of stabilization of the freight market was the approaching end of the month. Many Charterers, who made their deals with delivery on April dates, preferred not to take risks and close their positions on guaranteed dates, which did not leave them much room for trading. Generally the Azov market remains on the Charterers’ side, and part of the river-sea fleet, now equally considering the cargoes from Azov Sea ports and Black Sea ports, since the level of freight rates is comparable in both regions so far.
The navigation on the inland waterways in the Volga region opens completely on the 17th week. Such ports as Togliatti, Samara, Ulyanovsk become available for loading and discharge. The demand for tonnage from these regions is now keeping mainly in the direction of the Caspian region. Market insiders are expecting the rates for voyages from the river should catch a bid due to increased variability in ports of loading.
There has been observed an increase in the volume of grain purchased in the Russian Federation for subsequent export to Iran with shipments from the Astrakhan, Saratov and Volgograd regions. Such heightened interest in the Iranian market is explained by weather conditions. In mid-April the Iranian National Crisis Management Centre reported a forecasting drought in the summer season. It is unlikely that its own crop will be able to assure the domestic market of Iran, without mentioning Iranian flour mills, which were only half loaded with its own goods even in the harvest years. Therefore, we expect not only an increase in the number and volume of barley, corn and rapeseed shipments in the near future, but also the possible lifting of the wheat embargo.