9 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
During the 9-th week an ongoing sharp decline of Azov’s freight market has stopped. Many vessels have suffered severe delays on passing Bosporus due to unfavorable weather conditions. So, in some cases time lost summed up to 5 days. Major part of this fleet had faced Charterers’ refuse to grant extension, in favor of spot and thus cheaper tonnage. Owners of cancelled vessels do not exercise any hurried attempts to fix new voyages, as FOB prices are dropping followed by seemingly increased variety of cargo orders, which in turn holds market at previous week level. Shall the region settle in today’s balance or not, the next week will tell: Traders consider commodities prices to be far from the bottom and expect fall to continue.
Ice campaign has been officially cancelled on 28 of February on the Azov Sea. Theoretically this should pull the freight market down, owing to inflow of vessels employed ex Black Sea ports during the wintering. But considering the current freight-wise rivalry of both basins, there is no point expecting any notable fleet supply increase on the Azov. With the abolishment of ice restrictions ADSC shall again become the waiting place for idle tonnage instead of Kerch. Therefore, Charterers working ex Temryuk are compelled to be thorough in their search of spot vessels, as upon north-bound Kerch passing Owners are reluctant to return to Temryuk for loading.
Mild weather gives ground to expect earlier than usual start of navigation. River may become accessible even in mid-late March, which shall make positive impact on current market owing to following main reasons:
1. A new season for river ports shall begin. With ingress of additional volumes into both lichterage program and direct voyages to Azov and Caspian destinations will grow in terms of fleet demand.
2. Transit cargoflow will return to the market. As we see, demand on general cargo shipments ex Black Sea to Caspian area increases year-by-year and even now Charterers are actively planning their programmes. Those Owners who are interested have already adjusted trade of their fleet in order to provide openings at most convenient places to pick up well-paid project cargoes.
New nitrogen fertilizers-producing plant is expected to reach full power in Turkmenistan during this year, which shall dramatically increase throughput of transit cargo ex Caspian region. Ship Owners consider this new cargoflow to achieve likewise potency as ‘common’ grain voyages ex Volga ports to NIP or to Turkey, all the more so as substantial part of local Owners have decided to completely avoid calling Iran out of fear of potential sanctions from USA.
Caspian market has seen improved fleet demand during the previous week. Charterers are actively trying to close the deals for each of their open positions before the coming of Novruz, in order to avoid additional storage costs and also to lower the risks of prices drop after the Iranian New Year. Therefore, freight rates are basically keeping the same level. It is expected, that in the light of holidays any Traders activity will be kept at minimum and in the mid of March, right before the start of navigation, tonnage demand along with rates may decline, albeit not for long, to current years’ all time low numbers.