Despite the decline in grain export prices, business activity in the Azov region remains low. The current situation leads to the free tonnage overabundance in both spot and prompt. If last week Owners greatly drove up the rates for two weeks ahead, then this week the difference between spot and prompt rates has narrowed significantly.
Weather conditions began to have a major impact on the fleet disposition in the Azov region. In the first place, the weather worsened in the Kerch Strait, which slowed down the passage of vessels, as well as suspended transshipment on the Kavkaz roads. In the second place, the water level at Azov-Don Sea Canal outing may drop next week due to offshore winds, which will lead to delays and disturb the cargo export dynamics from Rostov, Azov and river ports. Experience has shown that such delays favorably affect the freight market growth, due to the fact that Charterers begin to pay excess for spot tonnage in a bid to arrange quicker shipment of the contracted cargo.
Given the low demand for tonnage in the Azov region, some Owners are forced to relocate their fleet. Sea vessels, which usually work from Temryuk in the height of the season, move to the Black Sea Ukrainian ports to take the cargo up to the full capacity. Old sea-river type vessels, which the major Charterers do not consider in connection with the insurance requirements, also shift to perform voyages ex Ukrainian ports. Under conditions of limited cargo offer on the market, non-standard parcels less than 3000 tons are not in favor, therefore Owners of vessels up to 3000 tons switch to work in the Mediterranean Sea. Such Owners’ strategy is not typical for September; usually this movement begins closer to winter.