Freight Report Week 46

Region: Russian River, Azov / Black Sea, Caspian 

Trade: Coaster shipments

The fright rates’ growth in the Azov region has stopped at the current stage. It is early days yet to speak about a decline in freight rates, but the rapid surge has ceased, and freight rates on average are remaining on the last week’s level. Much of this is accounted for by the fact that Turkish Importers suffer financial difficulties due to the tough domestic economic situation in Turkey. Market participants express confidence that demand from the Turkish side has dropped dramatically starting from week 46.

Despite the fact that quite a huge number of Ship Owners are willing to take a long voyage ahead of the coming into force of the ice restrictions in the Azov Sea, freight rates for long voyages are not falling. This can most likely be put down to the fact that short voyages were popular throughout the whole season, and Charterers did not fulfill their contracts in faraway regions – Izmir, Mersin, Lebanon, and Adriatic. On the other hand, the market is experiencing deficit in cargo supply for long voyages from most Charterers’ side. This is caused mainly by the big difference between rates for bigger tonnage (from 15 k and over) and coasters (below 5 k). Many Charterers team up in groups of two or three and fix one big vessel from the Kavkaz roads, which costs them cheaper by about 15$ per tonne of cargo than a coaster.

Since the end of week 46, it has been storming in the Black Sea, which has led to a large accumulation of vessels in Black sea ports, where a lot of ships has been trapped by bad weather, waiting for their turn for berthing and/or loading. In the light of the changing market condition, some fixtures are expected to be cancelled for delays, and freight rates can go down.

In the Volga-Caspian region, departures from the river are coming to an end. Charterers are showing solid interest to concluding winter-long contracts, but taking into account the considerably smaller amount of the fleet staying in the region in comparison with the previous year, Ship Owners are not in a hurry and mainly work on the spot market so far. Freight rates in the region have stabilized and have not changed already for over a week.

The official navigation close in the Volgograd region is scheduled for November 27, 2017, but passing through locks on a commercial basis is possible until December 1, 2017. The weather forecast for the region remains positive, which, in its turn, does not rule out the option of loading vessels in Volgograd up until mid-December.

Region: Baltic / ARAG 

Trade: Coaster shipments, Handy-size

In the time leading up to another worsening of weather in the Baltic/Continent regions, Charterers’ spirits have recovered in hope for the arrival of the late-coming tonnage delayed by weather conditions, which will be available for spot cargoes. The amount of such cargoes has only increased during the last week.

However, the situation with the fleet (especially in the Baltic) looks rather tense at the moment. Ship Owners of the 4000-6000 DWCC segment show their spot tonnage openings starting on average only from the 51st week or later. This obviously leads to growth in freight rates.

On the other hand, Owners of vessels w/o ice class have started to look actively for voyages to Southern regions with the aim to relocate the tonnage into regions without ice restrictions. Charterers and Traders alike instantly reacted to such demand by throwing in proper cargo lots.