During the previous week the slowing of freight decline on Azov’s Sea has reached such condition so that it can be considered a full stop. Main reason for it is a growing USD to RUR ratio, which is getting more attractive for Exporters due to increasing (in rubles) price on goods.
Many market participants have already been accustomed to tendency of when USD/RUR ratio grows, freight increase follows proportionally. This time, we have not seen any positive signs other than stop of decline. According to expectations of several Ship Owners, actual market improvement shall commence as soon as ice restriction are introduced and supply of available tonnage is greatly diminished.
Week 46 will be remembered mostly for its utterly unfavorable weather conditions which severely impacted on tonnage positioning in both Azov and Caspian areas.
Strong eastern wind has dramatically reduced water level at ADMK, which led to accumulation of vessels at channel and also of laden ships on inner roads of ports Azov and Rostov. Railway bridge raising at Rostov has also been temporally cancelled. This spoiled voyage plans for fleet which aimed to perform ‘last haul’ ex river ports. All in all such delays are adding to freight market increase, as when tonnage, awaiting permissible water level to sail, shall almost simultaneously depart, a sharp deficit of fleet supply may appear.
In Caspian region stormy wind has spoiled the game for most Ship Owners, who consider repositioning of their tonnage to Azov area. Substantial number of vessels is still being delayed, awaiting completion of discharge of transit cargoes. Kazakh ports suffer the most from congestion caused by weather. Such situation will lead to unexpectedly notable amount of vessels remaining in Caspian area for wintering, therefore, as soon as river navigation will be closed, rates may drop more decisively than it was previously considered.
On the week 46 an annual grain conference was held at Geneva, which gathered major part of Traders and understandably reduced market activity almost to zero. It is highly possible, that in the light of USD growth, conference ending and lack of fleet supply – all this in next week – freight market may expect soonest improvement.