9 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
In the Azov region, the trend for a slight increase continued during the 9th week. Rates on the basis of the voyage from Rostov to Samsun were at the level of USD 15 per ton of wheat. According to experts, this was contributed by a reduction in the number of spot tonnage. Many Owners in the past few weeks have favored long-distance voyages, so that they managed to reposition some of the vessels from the region. The situation on the commodity market remained difficult, but many Charterers were ready to pay extra for close shipment dates; this fact warmed up the market. Prompt rates did not grow, which indicates a negative expectation of Owners in short term perspective.
Additional risks include the unstable exchange rate of the Turkish Lira due to the continuing combat action involving the Turkish armed forces, as well as increased tensions between Russia and Turkey. At the same time, the price of grain continues to decline and Russian exporters do not keep up with its fall. According to Traders, this is another factor that may explain the low activity on the market. Many of them note that there are no reasons for a turning point, the market will stagnate until April or even longer; this situation will likely continue until the new grain season.
In the past two weeks, there has also been a clear trend to slow down coal shipments from the Azov Sea ports due to the seasonal factor: the heating season is nearly over in importing countries, so the demand for energy is declining. An additional factor preventing the freight market from growing is the elimination of ice restrictions in the Azov Sea. The amount of available tonnage in the region has grown, which resulted in increased competition among Owners.
Charterers and Owners are widely discussing news about the coronavirus. The hysteria caused by this disease brought down stock markets. However, according to experts, there are expected no global disturbances on the commodity markets. Thus, the demand for vessels should remain at the same level. Nevertheless, the reluctance of Owners to fix their fleet for voyages to countries with high disease burden may lead to the growth of the rates for such destinations.
The Caspian region market remained stable. Iranian importers closed their purchasing programs before Novruz Bayram, and there is no demand for prompt tonnage; this fact prevents rates from rising. However, there is still an opportunity to find cargo in the spot, but there are not many such offers. Therefore Charterers are taking advantage of the moment and trying to bargain for more favorable rates for themselves.