There is observed a sharp drop on the freight market after the introduction of export duties on grains. Owners did not believe that the market had gone down in the first half of the week, so they were ready to fix at least at USD 47 per ton of wheat from Azov to the Marmara Sea. By the middle of the week, Owners actively began to show their fleet on the market, but there was no interest in it. The increase in the export duty on wheat by USD 7.7 per ton led to a large reduction in offers. Amount of cargo on the market decreased, therefore Owners became more compliant by the end of the week and were ready to fix at rates of USD 45 per ton of wheat and lower. The most successful Owners were those who had managed to fix their fleet for September at the rates of the last week of August, and now they do not need to bother their heads about arranging their fleet. Next week, another increase in export duties is planned; this means that the market will continue to fall. The main question is how deep the decline of the freight market will be, and when it will come to balance.
This week started with bad weather and heavy winds at the Canakkale Strait. Many vessels ballasting for cargoes at the Black Sea and completing ongoing voyages were stuck. As per Owners, currently nobody knows how long the congestion over the strait will last. Some says 1-2 days, others says 3-4. At the moment, weather influenced more than 40 vessels. Like any delay, it causes some penalties per contract obligations; many vessels will miss the cancelling dates and, as a result, market will face many openings at the same time. Charterers could use this moment to break the current trend and get the reduced prices from Owners. Some of the Owners already aware of the situation and offer some discounts in front of extension of cancelling days. Forecasts say that wind is about 16-20 knots for the time being and it is only getting started. For the beginning of the next week, wind among with the rain will be raging on 32-35 knots which makes impossible to do any loading and discharging procedures which means congestion will continue to grow.
In different locations world shipping, there are various dynamics of freight levels. If we consider Supramax shipments, for example, scrap movements from the Baltic Sea, it is stable for a long time, so 35k parcels high stowage commodity still save level of low USD 40s per ton to Turkey side. In other hand, tonnage with deadweight from 25k up to 35k in the Black Sea is raising and reaches max possible freight level in history. Meantime, same fleet in the Red Sea is showing aggressive improvement in last year: voyages with fertilizers to the South East Asia region were fixed at almost tripled rate.