42 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Freight rates in the Azov region have shown positive movements of about 1-2 usd pmt during week 42. Rostov – Samsun lastdone was 21-21 usd per tonne of wheat. On the previous week Owners still had the upper hand during negotiations, being supported by Turkish importers’ growing demand for wheat and subsequently increasing rates.
Market participants consider grain prices may with high chances bounce off in the nearest future. This is owing to Egypt’s lowering dependence on wheat of Russian origin, introduction of temporal wheat import ban by Vietnam (which is in top-5 list of importers of Russian grains), risk of US sanctions against Turkey and slightly weakened lira. All these factors make a negative impact on trading activity in the area and question the continuing growth of Importers’ agriproducts demand. Rates improvement’ slowdown is expected, that is why Ship Owners are already considering contract jobs and keen on fixing with far laycan dates. Nevertheless tonnage which opens on the end-October being offered 3-4 usd higher than current workable level, that is understandably unappealing to the Charterers.
Unfavorable winds at Taganrog bay are still limiting port calls to Rostov and Azov for part of local fleet. In such conditions omskiy-type vessels, which have least draft, are in great demand where others are bound to wait for water level increase. Owners who fixed their ladies one or two weeks ago are now trying to employ the fact the tonnage running late to their advantage and escape performance of current voyage as market has dramatically grown up since then and spot fixtures have become more attractive.
Shippers ex most remote river terminals are ready to dump the price only to successfully ship their volumes, thus avoiding winter storing of goods or land transportation. All market participants are aware that in the light of soonest closure of navigation (27 of November is the last working day of Balakovo water-lock) freight rates shall only grow.
Charterers, aiming to somehow cut the losses of unfinished contracts, are now considering employment of cabotage river fleet (COA terms usually) with transshipment at Astrakhan or Volgograd. Better part of mentioned tonnage already works on Kavkaz lighterage and, in order to remove vessel from the program, rate shall be 2-3 usd higher than market level. Ship Owners in their turn prefer short legs so as to maximize their profits on the growing market.
Caspian region has retained decent pace of growth. On the average, rates have added 2 usd pmt against the background of insufficient Russian-flagged tonnage supply. Lack of available fleet coupled with forthcoming end of navigation push Charterers to improve rates to guarantee shipments schedule, as high profitability of Iranian market allows it.
According to producers, this year may see record high corn yield, which being one of the main agriproducts in Caspian trade. Thus, winter period promises improved fleet demand that will support regional market after navigation end.