Freight rates decline continues on the Azov Sea, while the main driver is still unfavorable situation on the commodities market. Turkish buyers are cutting the prices, following the declining lira. Concluding of new contracts becomes trickier as spread between buying and selling prices narrows. In the light of outstanding price on goods of Russian origin several buyers were compelled to develop other sources. Traders say, technically they are comfortable working with Russia, furthermore quality of goods is out of question, but current price level renders other aspects irrelevant as commercial part fails. So, nowadays major part of grains destined to Turkey is sourced ex West Black Sea: Ukraine, Romania, and Hungary, wherein Ukrainian producers shown most notable flexibility price-wise.
Aside from grave stillness of Russian inner grain market, export paces were halted by increased tariffs on pre-carriage of goods. Therefore most of the shipments performed now are ‘odds and ends’ of previously concluded contracts. Positive news regarding FOB-Azov grains price decline (about 7$ during 8-th week) surprisingly had no beneficial impact on the market. Importers are waiting for continuation of decrease and are not in a hurry to purchase. Considering the recent price surge, market participants expect this started decline shall proceed with similar haste.
Ice conditions in the Azov region are quite favorable for this calendar period. Almost no problems were reported in connection with berthing or with delays awaiting ice-breaker support. Nevertheless only a few Ship Owners are willing to employ their fleet on voyages ex Rostov ‘after the bridge’ terminals, except those bound for discharge there. So, the Charterers who decided to save on transshipment (‘after the bridge’ terminals generally charge less) may face difficulties finding suitable tonnage even on current oversupplied market.
Rates decline goes on within Black Sea as much as in the Azov area. According to local Traders, freight for Handy-size segment had already hit the bottom, leaving only improvement as an option, which is anticipated. Main reason for it is greater mobility of bigger tonnage, allowing them to change regions more easily, compared to coasters and especially to sea-river vessels. Therefore, deflux of unwanted fleet may alone improve the rates level.