On the eve of the new grain season, which will start in the second half of June, Charterers who can afford to keep their parcels in order to get better freight rates from Owners find themselves in an advantageous position and often play the angles. A new crop of barley begins to appear on the market of the Black Sea and Baltic, but there is not enough of it for all.
For many Owners who usually had to ballast from East and West Mediterranean due to absence of cargoes in that area, the situation has even worsened. Now they consider a long ballast legs to Upper Baltic and traditionally at Black Sea. Owners understand that competition for grain cargoes for these two weeks becomes tough and some of them could propose freight slightly below the market level in order to be sure that their fleet employed.
In general, we could say that for these two weeks, now there is most pleasant time for the Charterers to get a tentative freight at Black Sea market. After new harvest will drop on the market, freight will grow speedily and the market will be on the Owners’ side again.
The level of the Azov Sea freight market has frozen at USD 30 per ton of grain, and it has been holding for several weeks on the brink of the grain season beginning. The first parcels of the new crop have already arrived at some ports. This is caused by three factors: the beginning of harvesting, the coming increase in the yield of the new season and high grain prices on the global market. Based on this, it can be expected that freight rates for grain will not even fall below USD 30, but will only go up most likely. Rates for coal are quoted at USD 28, which is lower than for grain; though, there are also no prerequisites for a fall, since coal exports through the ports of the Azov and Black seas grew to 5.1 million tons amid the increased supplies to the OTEKO coal terminal in Taman. Even with the uncertainties on the scrap metal market due to the introduction of export duties from August 1, freight rates for scrap will be supported by a high rates level for grains and coal.
A couple of biggest grain traders told that the most interesting prices were in Argentina for last 3 weeks. They caught this opportunity to make real profit with shipments from Up-River to Libya, even though freight level was shock for Charterers: about USD 80 per ton for Handysize vessels. As usual, the grain flow continues to actively go to Algeria, Egypt and Yemen as well, and rates to the Red Sea are also pretty strong. With grain season almost started from Black Sea, more Owners will sure prefer to open their fleet in the Mediterranean Sea in order to get better position for ballast passage to Constanta/Nikolaev/Novorossiysk, and we can consider rocket high level about USD 90 per ton. Now, as grain season is already starting, we saw the Supramax vessel just loaded at Kavkaz with wheat intended to East Africa at the level of USD mid 50s pmt. One Owner of Ultramax tonnage has rejected offer with barley from Constanta to the Red Sea with TC rate USD 41k, preferring to load wheat from the Black Sea to Indonesia with USD 40k hire.