Weather conditions remained the main factor influencing the freight market of the Azov region on the 48th week. Strong Eastern offshore winds continued to restrain the fleet movement. About 80 vessels were stuck in the Rostov region or on the roads. Over the matter of the large tonnage accumulation, the Azov and Rostov ports administration did not allow the entry of vessels proceeding in ballast for loading. The water level decrease had also affected the passage of the Kochetovskiy water lock and the movement through the Don River.
The current situation did not significantly affect freight rates, and generally they remained at the same levels. This may be explained by the high grain export price of and, as a consequence, low Traders’ activity. Charterers, who are ready to work on these conditions, offer USD 17-18 per ton of wheat on the basis of the voyage from Rostov to Samsun. Owners propose rates at the level of USD 19-20 for the same direction. But while the fleet is waiting due to bad weather, negotiations are delayed, and Owners prefer to fix on the spot instead of fixing on far dates. More likely, the consequences of the fleet idleness will manifest themselves in two weeks’ time.
The grain market is packed with rumors about the forthcoming possible threefold increase in export dues on sunflower seeds. This measure is aimed at strengthening the position of Russian processers, which cannot fill their capacity and unlock the potential for oil supplies due to high export demand for raw materials. The record harvest of sunflower is expected in this year, up to 40% of which was planned for export. Other things being equal, from the introduction of prohibitive duties, domestic grain will lose to cheaper offers of competitors, and the commodity nomenclature of the Azov region may be reduced. In this case, the freight market may fall short of a significant part of the load.
According to the information received, the work period of the Volgograd Lock can be extended until the 10th of December. This should help Exporters to ship more volumes from the Volgograd and Saratov regions, provided that acceptable weather and ice conditions remain settled. In case of extension, the lock will work in commercial mode. On average, a day of commercial pilotage costs about USD 2000, which are divided between vessels passing the lock. Judging by Traders’ activity, steady demand for vessels from Kamyshin and Nikolaevskoye may remain till beg-mid of December; the business marginality of voyages from these ports allows shippers to offset the cost of commercial locking.
The Caspian freight market was under pressure of stricter requirements for weight checking on the approaches to Astrakhan. Some Charterers suspended new shipments until the issue with the local authorities resolving, others tried to solve the situation by cabotage transportation of goods from the river to Astrakhan. As a result, in the reporting week, the demand for tonnage at Astrakhan decreased, and the rates reduced slightly from their upper bounds. It is worth mentioning that this applies only to shipments from Astrakhan; the demand for tonnage from river remains stable.
During the reporting week, Owners of Russian-flagged fleet made the last voyages from the Saratov and Volgograd regions to Iran. Charterers offered rates from the river at USD 5 above the market to ship cargo residues, to close existing contracts and prepare warehouses and elevators for the winter season. Open lots from the Lower Volga are becoming more interesting for Owners who still have time to perform voyages from river ports. Due to the civil unrest in Iran, there was a fall in rates from Astrakhan by an average of USD 3-4, which can lead to a decrease in shipments to this country.