46 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Upon completion of the 46th week, it’s safe to say that the average level of the Azov freight market has already been formed until the beginning of December. The rate on the basis of the voyage from Rostov to Marmara is USD 24 per ton of wheat. During negotiations, Charterers still insist on further reduction of freight rates; though, it is not clear yet if the market will finally side with Charterers. A significant part of the regional tonnage is delayed due to the unfavorable weather conditions; besides, after the TMO tenders, the business activity of Traders increased. Therefore, in the medium term, stable work from the Azov ports will continue, and there are not expected notable changes in freight rates until December.
Amid the navigation’s end, Owners tried to get the highest possible freight rate for the final voyage from river ports. Freight ideas from Volgograd to Marmara reached USD 50 per ton of wheat, but there was no confirmation from Charterers’ side for such rates: in the current market conditions, the space for discussing goods prices is less than Owners’ expectations. The closing date for navigation remains unchanged: November 27. As practice shows, dates may be adjusted until December 1, also commercial passage through locks shall support belated voyages.
Changes on the Caspian market are worthy of note. In the course of work in 2020, it is clear that volumes shipped and rates in this region have significantly decreased. A notable part of purchased grain is sent by railway. As a result, those Owners, for whom the Caspian Sea is not their home region, have almost completely relocated their fleet for the winter. For Russian-flagged vessels, work in the Azov and Black seas is seen as more promising than in the Caspian Sea, considering the increased volumes for Kavkaz roads transshipment for enhancing supplies under TMO/GASC.
In general, the reporting week was very busy for the commodity market: the announced results of TMO tender, lowering of prices for corn in the Black Sea region, discussion of the introduction of a minimum price for grains in Ukraine, and plans to introduce a new export quota for grain from Russia. For the freight market of deep-water ports in the region, this means that volumes shipped will increase in the near future, and freight rates will also grow accordingly. The current working level for a coaster from Kherson to Marmara is about USD 18-20 per deadweight ton, which may add another USD 2-3 by the beginning of December.