17 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments

17 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments

One of the main events of the last week was the introduction by Turkey of strict restrictions related to the pandemic until May 17. Judging by the past year’s experience, enterprises are in a state of uncertainty and cannot confidently plan their work in such an environment. Currently, shipment dates of some of the export goods are already being changed to later ones due to difficulties with the delivery organization. Also, the amount of the usual non-food cargo from the Central Mediterranean to Turkey for further processing has noticeable decreased. Because of this, many Owners are either consider voyages from the Azov Sea ports to the Adriatic Sea reluctantly, since the return ballast passage kills the voyage economy, or offer a freight rate that allows not bothering about it.

The cancellation of the Egyptian state tender for the purchase of wheat by reason of too high prices will lead to the fact that supplies to Egypt will proceed within the market. There is quite a big difference between the FOB indicative prices for the 21/22 harvest from the Black Sea, especially considering that the payment was to be made against the cargo documents, without any delay. Further development will depend on how quickly the shippers will continue to “get rid” of old stocks: Russian Traders have few volumes left, while Ukraine and Romania are quite active in exporting.

Scrap market continues to grow. Due to official removal of China’s steel export VAT tax rebate from 1 May, lack of significant scrap commodity stocks of the major exporters and increased demand worldwide shows USD 10 increase and current sales prices even higher than they were in December 2020. Presently due to increased demand from the consumers we do not see the freight market pullback for the following month. In addition to the above, due to the Easter holidays from 1th to 5th of May coincided with the Turkish lockdown till May 17, we see that on 20-21 weeks will be a peak of activity in the industry. Thus, based on our close Owners information, we expecting the freight levels at Med/Cont should pull up.

The freight market went on a long Easter and Ramadan related vacation. Most European countries start work on May 5, but the 19th week for Europe will also be working by half. Muslim countries will celebrate Ramadan on May 11-15. Many market participants tried to close deals before the beginning of May, foreknowing the impossibility of stable work in the first half of the month. Despite this, the freight market continues to grow, even though there are not much fixtures during the holidays. The market will be fully formed by mid-May, and how it will behave is not yet clear.

Most Charterers from the Middle East prefer to reschedule their shipments to June dates or do FOB sales. Due to various religious and national holidays, the market situation in the Persian Gulf remains unchanged. Charterers hope that the market will dip in June, and Owners will be able to provide competitive rates.