40 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Last week, the Azov Sea market stood still either literally or metaphorically. The water level in the Azov Sea has fallen due to strong winds. According to the most optimistic forecasts, the water level will begin to rise only by October 10. Freight rates fluctuate within the range of USD 38-40 per ton of wheat to the Marmara Sea, though their relevance is lost due to the market’s freeze. As previous weeks show, it is clear that the market has already been steadily going down; however, by the time the water level raises, freight rates will also grow, since cargo offer will far exceed the tonnage supply at the market. Though, this effect will not last long, as after the surge, the market will continue to decline. Those Owners whose fleet has not got trapped in the Azov Sea are happy to work from the Black Sea ports, where the market is really high at the moment. For example, the freight rate for a 3k parcel of wheat from Bulgaria to Eastern Italy is at the level of USD 60 per ton. Therefore, it will be interesting to see how the falling market of the Azov Sea will compete with the high level of the Black Sea market.
Majority of wheat and barley volumes from the Black Sea for the second half of October was fixed in advance due to weather conditions; new corn crop began to be accumulated at ports and prepared for shipment. For the moment, Charterers are discussing lots for November dates, but due to weather improvements at the Black Sea massive numbers of tonnage is open, and Owners are battling for cargoes and dropping a few dollars to get desirable volumes. The above mentioned Charterers wait until the next week to see if they can get even better freight for spot-sales. Vice versa, Owners who prefer to work with grains now are looking for coal and cement cargo in order to keep their fleet employed.
Indian and Chinese demand supports Persian Gulf urea. The Persian Gulf urea market is having a breakout because of the lack of fertilizers at India and high prices at China. Chinese domestic demand and high local prices has led to the purchase of several import cargoes. During the few days, CIF prices on Persian Gulf market raised over 20%. Cargo flow will dramatically improve in several weeks, and demand for Supramax and Ultramax tonnage at Persian Gulf will take off.