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

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

Freight rates continue to grow in the Azov region. Those Owners, whose vessels open at the end of 26th week, prefer to wait for the beginning of July, rather than to fix the spot cargo. They are assured that at the beginning of next month the market growth will be so rapid that it may cover for the loss of a few days of idleness.

Charterers who planned shipments for the first half of July also prefer to wait for spot dates, as they consider that the current Owners’ expectations are inflated, and in fact the market will grow slower, so closer to the dates it will be possible to find a vessel at the more favorable rate.

Besides, there are factors that place in question the fact that the market will unconditionally side with Owners in the coming weeks. Due to the lack of rain the grain-unit of the new crop is quite low, and not all buyers are ready to enter into contracts having such quality of goods, despite the fact that the shippers are trying to issue the situation and make their offer more attractive by mixing new grain with the previous harvest. It is expected that the freight will increase by another USD 2-3 on the 27th week, but a more rapid growth is unlikely.

This year, the Rostov Universal Port is planning to move away from transshipments of general cargo and to reorient completely to work with bulk cargoes. The terminal has already signed contracts for large volumes with the major grain Exporters. One-time processing of small lots of general cargo will only slow down the contract transshipment of grain and may cease to be commercially reasonable for the port. Most likely, it will increase the demand for the Russian-flagged vessels for performing of transit voyages to the ports of the Volga due to the reposition of cargo flow, which previously was being shipped with transshipment in Rostov.

The Caspian market shows weak activity in comparison with the Azov market. Major companies continue to work quite steadily, small Exporters can not always make a sale and solve problems with the payments. Despite this generally downward dynamic, Iran has become a leader in grain purchases from Russia since the beginning of June this year. During this period, it was shipped about 194 thousand tons of corn and barley. Some Traders expect that Iran will also start buying wheat in the near future. Problems with payments execution by Iranian buyers are forcing participants of the highly marginal Caspian market to search new schemes of work. Thus, many Exporters now enter into contracts through major grain Traders who have a possibility to get money for the goods. In addition, the market has new players who have not previously engaged in grain trading, but who has the financial ability to handle the deal.