28 week: Russian River, Azov / Black Sea, Caspian; Coaster shipments
The freight for voyage ex Astrakhan to Iran kept the level of two last months and amounted USD 31 per ton of wheat. It is not typical for the beginning of the high grain season. Market participants suggest that this situation will continue in the next few weeks due to the diffuse export prospects with the Iranian Republic.
Russian producers report significant losses of barley and corn harvest owing to the drought. Therefore, Exporters still avoid the shipments of these crops in order to wait for an increase in the cost of goods on the market. Some Charterers express confidence that rates on the Caspian basin will not just remain at the same level, but will start to decline in the near future, as corn and barley are the key export commodities in the region. Meanwhile Traders have already noticed a drop in sales in the Iranian direction due to American sanctions and the unstable Iran’s national currency. This situation has a critical impact on the work of the Caspian Ship Owners, who receive less profit because of decline in demand for tonnage.
The freight continued to rise in the Azov region and reached by the end of the week USD 26 pmt of wheat basis Rostov – Marmara. This is $ 2 more than the level of week 27. The reason is that the demand for ships in the Azov basin expressively exceeds the supply. Also, the growth in rates is supported by unwillingness of regional buyers to conclude the new contracts but expect positive market fluctuations.
The Charterers, who under contractual obligations bound to perform long hauls so as to deliver goods, faced with a serious problem – to find available fleet. Some of Ship Owners have already employed their fleet on consecutive voyages with distant dates (until the end of the summer). And those, who work on the spot dates, prefer the near destinations.
The coal Charterers took «wait-and-see» position before the August, because now it is irrational to compete with the grain rates. When grain market is low in winter, the most of Ship Owners are minded to carry the coal, but it’s not profitable in the high season.
There are problems with the harvest transportation from the fields in the Volgograd region due to the heavy rains. The water-worn roads occupy more time for delivery the cargo to the river elevators. This lead to the troubles with the timely loading of ships. For this reason the amount of available tonnage is going up, freight rates are rising.