20 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Spot tonnage on the Azov market is in demand among Charterers. New rules for calculating export duties have led to concerns of grain shippers, and many companies are in a hurry to ship crops fitted under the duty in May. At the beginning of the week, the rate on the basis of the voyage from Rostov to Marmara exceeded USD 20 per ton of wheat/corn. At the end of the week, the rate for long-distance voyages hit the average 40s. Market participants are still trying not to enter into new contracts for crops that fit under the duty/quota for June in small parcels from the Azov Sea ports. Only large players with more opportunities for price formation are working on shipments from deep-water ports and roads transshipment. This affects the freight market by the fact that only spot/prompts are considered for firm work.
An interesting situation has developed on the freight market from the deep-water ports of the Black Sea. At the moment, the market is very high, and grain traders are in a difficult position: they are not currently a forming factor in rates, and amid falling prices, they have to accept high freight. If this situation continues, the grain will be shipped in large parcels, and the rates for coasters will be reduced. Amid crop indicative prices 21/22, it makes no sense for shippers to hold back the goods.
Charterers of non-grain cargo are forced to find new algorithms for working under the influence of high freight rates. For example, some large companies try to take vessels for contract work or for time charters. The usual expectations that the market will go down, are not justified since January: market fluctuations occur, but significant ones only upwards.
River Plate grains looks preferable to the Owners and Operators again. Now the TCE requirements are about USD 24000 to MED direction. This caused by an increased productivity in the region. This turns the situation upside down when the backhaul becomes more welcome than the front haul. Thus we see the TCE from ARAG to NCSA for USD 17000.