A new week began with a fall on the Azov-Black Sea freight market. The rate for a 3k parcel of wheat from Azov to the Marmara Sea decreased to USD 36 per ton. But this fall turned out to be quite fleeting, as rates grew back to the level of USD 38 per ton by the middle of the week. Some Charterers hope that the market will not go above USD 40 per ton, since at that rate, shipments will become more cost-efficient from the Black Sea ports, where the appetite of Owners is whetted, but not as much as of the Azov ones. In the near future, it will be possible to get a clear vision whether the market will go above USD 40, and how this will affect shipments from the Azov Sea.
The dry bulk market is expected to post additional gains in the weeks to come. Increased commodity trade has resulted in port congestion mounting to multi year highs. Port congestion worldwide is also affecting the supply side. According to various estimates, the global breakdown of supply chains will recover from six months to three years. During this period, freight rates in both the Atlantic and Pacific will continue to grow. Time charter rate in Atlantic was USD 33k from the standard route from ECSA to MED. In Pacific, from CJK to WCI/PG, the rate was USD 34k, which is known as peak performance since the beginning of the year.
Many Traders say that there are not much commodity sales on the Far East region. As we were advised, Charterers switched to ‘private & confidential’ way of doing business in order to calm down the market. Thus, the agreements are not officially open to the market. Reportedly, TC rates for voyages from the Black Sea for Supramax with grains have reached the peaks on USD 55-60k per day. We also see an activity of the smaller/coaster tonnage, which freight level is growing at a much slower pace.
Various grain Charterers who don’t own fleet are afraid to take freight responsibility and prefer to sell on FOB basis. Grain giants either ship with their tonnage or cover everything by contract obligations with major Owners. That makes impossible for Handy-size Owners to find spot cargo on the market to usual destinations ex Black Sea to Egypt, Turkey and Libya, as it all goes off-market.
If cargo eventually drops on the market, Charterers are waiting for good rates, as competition is usually between 3-4 options. Handy parcels ex Black Sea to Libya last week was fixed at the level of low 40’s despite some of the Owners are in the clouds and asking for 50’s for the same voyages, so they remain with spot vessels in the end.