43 week: Russian River, Azov / Black Sea, Caspian. Trade: Coaster shipments

43 week: Russian River, Azov / Black Sea, Caspian. Trade: Coaster shipments

Freight rates in the Azov Region continue their growth: the average rate for a shipment of wheat by the route Rostov-Samsun amounts to 40-41 USD per tonne.

The rates increase can be explained by the following factors:

  • Cargo supply exceeds the amount of tonnage available;
  • Many vessels are engaged in long-term contracts;
  • The price of wheat on the international market continues to grow;
  • Worsening weather conditions bring about their corrections in the regularity of departures

Unfortunately for Shippers of non-grain cargoes, the growth of prices on coal and metal scrap is not comparable with the growth of prices on grains, and, not referring to contractual shipments, such Traders find it increasingly difficult to compete for tonnage on the spot market.

The shortage of carriages has put in question grains’ export programs to the north-eastern direction, and many Shipper-Traders (even those who historically ply through the Baltic) will redirect their cargo flows, making departures from southern ports. There is even more cargo transshipped through Azov ports, which leads to the increase in freight rates as well.

Charterers that do not manage to ship their merchandise from the Samara, Saratov and Volgograd regions start to calculate their transportation by railway to Astrakhan and further on, to the ports of Northern Iran.

Due to the unpredictability of the freight market in the Azov region, Traders turn down offers of long-term contracts and go with sales regarding a particular vessel at a particular rate: as a result of incorrect budgeting many Traders had to fulfill their contracts with the negative outcome, and now they take a more careful approach choosing transport solutions by sea.

Most Ship Owners now prefer long voyages inside of the Black Sea, ignoring the common ratioы Marmara + 2$ to TBS and Izmir +3 $ to Marmara and consider voyages to Marmara or Izmir only under the condition of additional 3-4$ to the usual increment size.

Ship Owners are starting to pay attention to long-distance voyages for the end of November to Mersin, Izmir and the Adriatics, so as to be able to leave the Azov region at high rates. With the worsening of weather conditions, a large accumulation of the fleet is being observed at the Kerch Straight – around 20 vessels heading in and out. In this regard, a large number of open positions in the Azov Sea is expected by mid-November, which will significantly affect the freight market in the region.

Rates from the river will reach their maximum within the two following weeks, this being the last opportunity to ship cargoes from river ports until the close of navigation.

River locks schedule:

– Samara – closing November 20, 2017

– Balakovo – closing November 24, 2017

– Volgograd – closing November 27, 2017

Don River locks are closing November 27, 2017.

According to Ship Owners, due to the deterioration of weather conditions in the southern part of the Russian Federation, the official close of river navigation on the Volga-Don Canal is planned for a later date – November 15 -20.