Demand for tonnage remained stable in the Azov region on the 50th week. Some Owners took advantage of the moment trying to offer prompt vessels at current rates. In general, this didn’t really matter for Charterers: the demand for tonnage for period in late December-early January is extremely small. However, Charterers, especially those who work with foreign companies, were ready to pay extra to find a vessel in spot, thereby protecting themselves from the risk of idleness on holidays. Owners have so far managed to keep demand for the fleet, and freight rates grew by another US dollar. The rate on the basis of the voyage from Rostov to Samsun was at the level of USD 23 per ton of wheat.
Russian banks will go on the New Year holidays on December 31; they will not back to work up to and including January 8. This usually complicates foreign trade activities and reduces to a minimum the number of transactions during this period. Shippers are also not eager to interrupt their days off organizing shipments on holidays. All these factors will low freight rates at the beginning of the calendar year. Therefore Charterers having the opportunity to hold their cargoes, move shipments dates closer to the middle of January 2020.
Many Owners working in the Azov region purposefully take voyages from the ports of the Mediterranean or Black Sea to avoid idleness at the Azov ports. Those of them, who do not have sufficient work experience in the sea, quickly confirm the rates; therefore they are highly sought after by Mediterranean Charterers. Rates on back-haul cargoes not intended to the Russian ports are decreasing closer to the year’s end.
During the reporting week there was observed a high demand for sunflower seeds in the Azov region. It was ready to be shipped both in spot and in prompt in parcels of 1000-4000 tons from the ports of Yeisk, Azov and Rostov. First of all, this linked with the increase in purchase prices for sunflower. Owners consider such cargo more eagerly, since the rate is given lumpsum, and the full volume of holds is being used for the maximum draft at Azov.
The rate from the Black Sea ports on the basis of the voyage from Kherson to Marmara was at the level of USD 21 per ton of wheat. The volume of shipments is large, and the situation will not change until the year’s end. Right after the New Year holidays, there should be expected a reduction in rates; however, the market will rise the end of January, because the quality of Ukrainian grain this year is quite high, and the price is very competitive.
Broadly speaking, the market level in the Caspian region has not decreased; the amount of cargo is still large, but it is mainly shipped from Makhachkala and Aktau. Demand for tonnage from Makhachkala has increased significantly due to weight restrictions on the approaches to Astrakhan. Market insiders continue to complain that under current conditions, road transport from nearby regions is impossible to calculate; and there is no way to circumvent the restrictions, because the scales are installed at all entrances to Astrakhan. Shippers are reorienting their cargo flows to more affordable ports, as a result of which the rates from Makhachkala began to grow. The rates from Astrakhan slightly decreased against the background of cargo flow reduction. The rate from Astrakhan to the Iranian ports is at the level of USD 39 per ton of corn, from Makhachkala is at the level of USD 30. Iranian buyers, for their part, are beginning to press Russian partners for the shipment of grain; for failure to contracts fulfillment, they can lose quotas for the import and export of goods, which are very difficult to obtain. From the beginning of January, there is also expected a fall on the Caspian Sea market: a large number of tonnage open in spot will be looking for cargo due to the long New Year holidays.