There was an increase in demand for grain shipments from the Azov region on week 36, the Charterers has been realizing their export program ambitiously. Over the past week, rates from the Azov basin and Russian river risen by USD 2-6 for all destinations of Black and Mediterranean Sea. Nowadays workable freight level for voyage ex Rostov to Marmara reached USD 25 pmt on week 35. This is 3 USD more than level of previous week. Ship Owners rely on the market will provide great opportunities for next few weeks, for this reason most of the contracts are concluded on spot dates. The rates on remote destinations are rising faster than short-distance hauls, as Ship Owners try to work on a short leg within the Black Sea. Thus, they will be able to catch the moment at the market’s peak.
A prolonged severe storm in the Azov basin last week led to the accumulation of ships in the Kerch Strait and on the approaches to the Azov-Don Sea channel. Tonnage is forced to stand idle due to hazardous weather conditions and lowering of the water level in the channel (up to 3.1 meters) owing to offshore winds. As a result of this, charging of ships and a corrective of the fleet schedule in the region are starting. In these conditions, the Charterers incur additional expenses for storage of cargo in elevators. Considering that the drafts of majority vessels in full load more than 3 meters, the ships are waiting for optimum level water recovery (3.8 meters) in order to leave Azov.
In mid-September, market participants predict an increase in rates immediately after the tonnage almost simultaneously leave the Azov Sea. The number of vessels in the region will be significantly reduced, and Owners of free tonnage will raise the freight rates.
The main business activity on the river moved from the Volgograd region to the Balakovo, where one of the top Russian Exporters is currently currying out substantial volumes of grains, for this reason rates from there grow faster. There are more shipments to the Black Sea directions than to the Caspian. Market participants explain this by the fact that the corn harvesting is at a slow pace, and parcels of new yield is poor. Therefore, there are no other goods except barley for shipments to Iran. In this context the demand for Russian-flagged tonnage is going up, the rates reached USD 54 pmt of barley basis Samara – Iran, while the freight in Astrakhan remained at the level of last week – 28 USD due to poor supply of cargo. It is expected that the corn parcels of a new yield, which slowly come to the port of Astrakhan and river terminals, may change current situation. At the same time, Caspian Traders consider that economic sanctions against Iran hamper international trade and also keep the growth of freight down.