7 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Over the past week, the balance of power in the Azov region has barely changed. Charterers ‘ freight ideas remain beyond the pale of profitability for Owners, so most of them prefer to fix their vessels in spot until an acceptable offer is received. Experience has shown that the spot fleet takes on average from 2 to 4 working days to find a suitable cargo. Commonly these vessels are fixed up by Charterers with contracts close to deadline; for them, the dates are more important than the additional margin of USD 1-2 per ton. The abundance of spot tonnage does not allow the market to grow, but there is no further way to decline, so rates remain stable for the second week in a row.
All ice restrictions were canceled in Azov and Rostov due to rising temperatures. Unfortunately for Owners, this factor may have only negative impact on the market: there may be an inflow of coaster fleet with no ice class to the region, which is already overstuffed with the tonnage supply. The Black Sea market is currently not far behind in dynamics from the Azov market, and in the next few weeks there is expected no growth.
Amid the background of grain trade activity tended to zero, the freight market survives largely by means of increased shipments of non-food cargoes. Coal, fertilizers, metals and general cargo are shipped with an unusually high intensity for this time period. Falling freight rates allow Exporters to compete on foreign commodity markets. However, since grain remains the main cargo nomenclature of the region, everyone agrees that freight growth is possible only with the resumption of active trade in this segment.
The Caspian region showed a slight increase during the reporting week. Owners attribute this to grown activity due to forthcoming Novruz Bayram. Many Iranian Importers commonly increase the volume of grain purchases before the holidays. The growing demand for tonnage allowed Owners to overcome a prolonged downward tendency in rates: the market showed growth from almost all ports, except for Volgograd; there, on the threshold of the navigation opening, the difference in rates with seaports is gradually coming to the usual values.