Freight Report Week 11

Region: Russian River, Azov / Black Sea

Trade: Coaster Shipment

Freight rates at 11th week has remained on the level of last week and amounted 36 $ basis voyage ex Rostov to Marmara with wheat, despite rumors regarding potential improvement after the full recovery of business activity in the Azov region.

The abolition of ice restrictions in Azov area led to the inflow of tonnage without the ice-class, which pulled the rates down for short period of time. The newcomers mostly repositioned from jobs ex Black Sea ports, wherein freight is substantially cheaper. Without enough time for exploring the market, Owners were ready to fix voyages from Yeysk / Taganrog at rates well below market level. During the previous week vessels were fixed at 27-28 $ basis voyage from Yeysk to TBS, which is actually 5-6 $ less than the previous week level. Due to sufficient increase in fleet supply for Yeysk/Taganrog and followed decline in rates, Owners of the sea-river fleet with ice-class were forced to reorient for Rostov/Azov cargoes in order to win better rate.

The period of preferential import of barley to Turkey (zero tax until 1 April) is approaching to an end, and the problem of deficit spot tonnage for cargo shipment is still topical. The dates of delivery of the cargo to Turkey play a vital role for recipients. Traders involved in the sale of barley, consider for fixing only those vessels which guarantee to arrive at discharge ports until 1 April. The demand for such dead spot tonnage is increasing, rates are being adjusted upwards.

Due to Iranian New Year and improved price on grains (mainly corn) in the inner market, the intensity of voyages on the route Astrakhan – Iran had decreased. The possibility that Iran will lift the embargo on wheat is growing every day. Earlier this was explained by the desire of the Iranian Traders to strengthen the export of flour to Iraq and Syria, but nowadays the market participants expect the appearance of prolonged drought in Iran, which is likely to adversely affect to the harvest. The start of navigation in Volga is near, in this connection the demand for the fleet with Russian flag is accruing. According to market participant’s view, freight rates from the river ports will grow throughout whole navigation period. Some Charterers try to fix river tonnage on consecutive voyages now and at more favorable rates. The demand for fleet from Astrakhan is falling, so rates go down and amount 43 $ per ton with wheat on the route Astrakhan – Iran, which is 1 $ less than last week.