During the reporting week, rates in the Azov-Black Sea region began to grow. Freight level for a 3k parcel of wheat from Rostov to Marmara reached USD 33 per ton. A sufficient number of goods offered on the market allows Owners to make optimistic forecasts for the next few weeks. However, there are several factors that may cause difficulties with shipments. Firstly, it is bad weather and hurricanes in the southern regions of Russia, which seriously damaged the grain harvest. And secondly, many producers have just started harvesting, and the formation of parcels will become possible only nearer mid-August. Therefore, by the end of the month, a gap between Owners’ ideas and rate level that Charterers are ready to pay may occur.
Despite last week expectations that the Black Sea will drop a little before the new grain crop season, market continued to grow steadily. Having lowered their rate anticipation, Charterers were unpleasantly surprised that Owners had raised their rates in return. So now, Charterers who were checking some ‘sub sale’ possibilities, witness sky-high twenty dollars gap making it impossible to work on such levels. Market excitement is also supported by very active shipments of steel products: new export duty will apply on August 1, and Russian exporters hurry up to ship maximum possible volumes before the introduction. In general, it is safe to say that tonnage demand in the Black Sea will be high, and fight for the vessels will be furious for upcoming months. Owners are rubbing their hands in anticipation.
The demand for such commodities as iron ore, coal, aggregates and clinker increases the freight levels and time charter rates accordingly. There has not been observed a sharp increase, but the systematic upward movement of the freight market in the Atlantic was revealed.
Voyage with agriproducts for 32k dwt from Damietta to Jorf Lasfar was fixed at USD 38 pmt.
Voyage with grains for 31k dwt from Russian Black Sea region to Egypt Mediterranean was fixed at USD 35 pmt.
Coaster tonnage of about 8-10k dwt on same direction from the Black Sea to East Mediterranean was seen for USD 40’s.
Continent market is still on the low side, thus from ARAG to Algeria, the vessel of 30k dwt was fixed with grains at level of USD 34 pmt.
Israel ports congestion is still there. According to local agents, the waiting time is about 2-3 weeks for the coasters/Handy tonnage. The steel parcels from the Black Sea to Israel for 20k dwt vessel was seen at high USD 50’s pmt.
In EU, analytics show very positive expectations of wheat in France, Romania and Baltic countries. This season probably will show some changes in supplies.
The main routes of grains seem not changed, but some differences can be considered. China already purchased about 1 million tons of wheat from France, and according to some rumors, it will be transported with 300k dwt ladies. Therefore, it seems like option for Germany and Baltic countries to have more activity with exports to Algeria; Iran is also expected to remain a major outlet for German wheat. Besides, tenders for wheat were held in Jordan and Saudi Arabia, where on Monday SAGO purchased around 505k tons of wheat, and origins offered were the European Union, Black Sea region, North America, South America and Australia with the seller having the option of selecting the origin supplied. Regarding Ukrainian crop, this year total grain exports almost double up compared last year and already stand more than 500k tons, plus Ukrainian producers have now harvested more than 1 million tons of new crop barley. China will put out 23.488 KMT of imported corn from Ukraine to tender on 16 July.
Few words about freight levels: The Handies for Inter Med have increased up to USD 27k/d basis Canakkale, and the voyage to the Continent is at USD 28k/d. The Transatlantic voyages are now approaching USD 30k i.e. 26-27k to USG, and USD 25-25,5k to the ECSA. The voyage to the Far East is priced in the mid USD 30k/d.
Supramax rates remain roughly the same as last week. A voyage with scrap by a 56k dwt vessel from Baltic to East Med was fixed at USD 35k/d DOP Riga, and at USD 36k/d by a 58k dwt vessel open lower Baltic.