The freight rates in the Azov Sea continue to grow rapidly. The market met the beginning of the week with rates of USD 40 per ton for a 3k parcel of wheat. Due to the lack of spot tonnage Charterers made deals at inflated rates, so those who needed to fix during the week had to overpay for open vessels. The main problem is that most Owners are ready to work no further than the prompt dates, as they do not want to lose money on the growing market. Moreover, many Owners refuse to consider options for voyages to long-distance destinations, such as the Adriatic and Spain, even though Charterers are ready to pay for these voyages above the market. In general, the most preferable destinations are now the ports of the Marmara and Turkish Black seas.
Charterers cannot stop rise of coaster rates in the Black Sea due to lingering fleet shortage for August dates; freight rates for small coasters fleet continue to grow gradually amid the further growth in wheat exports from ports of Russia, Ukraine, Romania and Bulgaria. Owners feel the hunger of Charterers as they have been attacked with same cargoes via different channels; as a result, they can dictate their conditions and not willing to bargain freight-wise at all.
Main victims are the participants of TMO tender, who usually dump prices a little in order to win the tender counting on good relations with some close Owners. Within a week, prices have risen by USD 5; those who hoped for Friday fixing now thinking to pay the penalties for non-delivery rather than pay the freight from their pocket. Charterers advised that two TMO tenders in a row were cancelled without an official reason, but it’s obviously because of market’s hike.
Vessels are leaving Rosario and having to cut cargoes by 25% due to severely low water levels; according to the head of the local ports chamber, the area expected to stay dry for months. Bearing in mind that the majority of the Shippers could not support the Consignees with additional freight increasing due to the dead freight occurred, Charterers are taking all possible measures to deliver the cargo to the nearest deep-water ports and trying to organize the roads transshipment where possible in order to have better freight rates and minimize the loss. So if you look for additional reason for the freight market rocketing: here you go. TCE from Rosario to Continent with grains for 32k vessel is USD 43500.