Region: Russian River, Azov / Black Sea, Caspian
Trade: Coaster shipments
The Kerch strait was closed from 27-30/08, which caused a severe congestion of tonnage on both sides. As a consequence, some of the vessels going to Turkey were late for Kurban Bayrami when they finally arrived at their ports of discharge. Now this fleet will be waiting for berthing until 5/09, which will lead to an accumulation of vessels at Turkish ports, resulting in a spot tonnage deficit during weeks 36-37. As for the opposite direction, it is very likely that a wave of cancellations will occur soon, as most of the vessels missed their laycans due to the prolonged passage time at the Kerch strait, and now the Charterers are able to cancel their voyages in order to avoid surcharges for the vessels’ idling.
According to the information received from grain Traders, however paradoxical it might seem, the removal of some additional participants in the chain “Producer-Exporter” has raised wheat prices, since some Exporters reportedly include VAT in their export goods prices.
Due to the Turkish holidays, the market in the Azov region has grown slack. As a matter of fact, major Turkish Importers have closed for the holidays already at the end of week 34, new deals are not being made, and the demand for tonnage is not growing. Only the Kerch’s factor prevents shipping rates from a global decline. The situation with market activity dynamics after Kurban Bayrami is not clear yet.
Scrap and coal prices on the Turkish market are growing, which contributes to the increase in freight rates for these goods. Whereas coal is usually shipped USD 2-4 pmt lower than grain rates, at the moment quoting for these two types of cargo has almost reached parity. Rates for scrap are now USD 6-8 pmt higher than for wheat, as opposed to the usual USD 3-4 pmt difference with grains.
River elevators in the Volga-Caspian region are more actively exploiting the river fleet to relocate their grain volumes to Astrakhan, intending to forward them to NIP via non-Russian flagged vessels. Therefore river shipping rates from Samara to Astrakhan has already begun approaching the level of the Samara -Saint-Petersburg route. River ships’ Owners also prefer to keep their fleets in the south region and to work short voyages to Astrakhan, notwithstanding the necessity of ballast voyages to the load ports.
Region: Baltic / ARAG
Trade: Coaster shipments, Handy-size
Grain harvesting in Baltic and Northern Europe regions is picking up pace. But we are yet to see extensive cargo turnover, since most ship parcels are still being formed. According to Traiders’ forecasts, the beginning of full-scale freight flow is to be expected approximately on week 37.
As a result, a sharp surge in the supply of spot/prompt tonnage has occurred in the region. However, Ship Owners quite reluctantly fix at the current rates, anticipating the soonest rise. Therefore, cargo orders with mid-September laycan dates are being quoted dramatically higher than the current workable freight level.
Traders in non-grain segments of the market are trying to take advantage of the situation and fix available tonnage of coal, scrap, fertilizers and other cargoes on a spot basis. Despite many Ship Owners are keeping their fleet partly in the spot market, waiting for the rates hike, eventually they are bound to fix at the current rates in order to avoid financial losses.