East winds blew in the Azov Sea all 37th week, which greatly decreased the water level in the Azov-Don Sea Canal. As a result, almost the entire fleet working in the region stood for a week in wait for the water level increasing, and the queues have accumulated both at the entrance and at the outing of the ADSC. On the one hand, this led to the fact that the market showed a small growth, as Charterers who were looking for a replacement for the delayed vessels fixed the entire spot tonnage. On the other hand, there was no serious increase in rates, as the grain market is still on the decline. Producers believe that the grain price has already reached a minimum, and the growth will begin in the next two weeks. Buyers are not in a hurry with purchases and are trying to push the market even lower.
It is expected that the activity on the commodity trade market of Russian goods will be minimal in the 38th week. The reason for this is the geopolitical situation with attacks on Saudi oil refineries. The market is waiting for the growth of oil prices and, the growth of the ruble against the US dollar accordingly. Therefore, the export prices decline will be countervailed by the rise in goods prices expressed in US dollar, and it will not bring sellers and buyers closer to the deal closing.
The fact that due to lingering delays resulted from the bad weather conditions in the last few weeks, almost the entire fleet has already been fixed before the end of the month, may play into hands of Owners. Charterers currently making deals with a delivery date before the end of the month will have to pay more for the spot fleet. In such a case, rates may grow slowly even with low trading activity, until the situation with the fleet is normalized.
The freight market in the Caspian Sea again showed negative dynamics after the recent stabilization. The main factors affecting the market are the same: difficulties in receiving funds from Iran and, as a consequence, the slack period in the work of major Charterers and shippers, as well as the clear fleet overabundance and dumping from the side of the Iranian-flagged fleet Owners.
The transit cargo market is gradually entering its completion phase. River navigation closes at the end of November, and Owners are already beginning to organize further work of the fleet in such a way as to position their vessels in the one basin or another for the winter. This situation also strongly affects the level of freight rates, which can already differ greatly in dependence to the approaching of the end of navigation. For spot dates, Owners use current market levels, while they quote an average of 15-20% more expensive for mid-October. Transit rates for voyages to the Caspian region are also growing on the basis that the main supplier of back-haul cargoes from the Caspian Sea, the Garabogaz Fertilizer Plant, is still closed due to prevention activity. Most likely, in order to avoid traditional idle time, Owners will prefer more reliable (fast) cargoes from the river to the Black Sea at the end of navigation.