The freight rates in the Azov Sea continue to reduce. The market met the beginning of the week with rates of USD 44 per ton for 3k parcel of wheat. The rates are declining only in directions of the Turkish Black Sea and the Marmara Sea. Due to the repair works of the Canakkale bridge, Owners are less interested in long-distanced voyages, so the rates for all directions further than the Marmara Sea are not reduced at the moment. Contracts that may wait will be fixed next week, so Owners are waiting for which way the market will go. Hence, it appears that the next week will be very active in regards to fixtures, since many Owners are aimed at firmly work on their fleet. Besides, due to the fact that Owners will do this at the same time, it will certainly pull the rates down, because they will create additional competition by doing so.
It has been a tough week for the Black Sea trade. Canakkale bridge repair along with a bad weather affected all the players on the market: Owners, Charterers, Traders. As expected, Charterers lowered their expectations about freight level, but could not get what they wanted. Charterers wanted about USD 2-3 discounts for ongoing voyages and negotiations for the vessels that had a chance to pass the Canakkale Strait because authorities suspended bridge repair works due to bad weather for some days. According to forecasts, weather conditions will be much better next week, and wind will stay calm. Authorities will resume the bridge construction and delays will commence again. Turkish authorities will do massive works on the bridge on 10th of September and finish around 12th. During that period, special permission is required for all types of vessels over 200 LOA. The bridge passage will be regulated by the schedule, so Owners expect congestion over that period and normalization of the situation by 15th of September. Local sources expect closures until the end of the month, and then normal or very less closures will start again. The total extra waiting on the Turkish Straits can be up to 4-10 days in the grain season, which means possible additional costs for Owners; that will definitely affect the market prices.
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. As one of the good Charterers said, they struggling now to make business with short distanced shipments with fertilizers inside East Mediterranean region; even if Charterers will run around all the market with their offer of USD mid 20s for one-day-in-sea voyage from Egypt to Lebanon, they will meet only USD mid 30s from Owners’ side.
We consider that the market of Handysize and Supramax has suspended its growth over the past 2-3 weeks. Rates are slowly and comfortably declining to the lower side now. Of course, all parties now are not expecting some critical changes, but it is a situation where Owners and Charterers definitely learnt market conditions and adapted to them. Vessels may find suitable cargo without any problem likewise Charterers have a couple of options in hands. In any case freight level for main trading routes are settled down, so it’s unlikely will start to show some improvements. We are looking forward to observe good numbers of quite easy fixtures for the next month.