Region: Russian River, Azov / Black Sea, Caspian
Trade: Coaster shipments
The Black Sea is being hit by a severe storm. Vessels have to hide from the tempest, respectively being delayed for next voyages. Besides, a crowd of vessels has gathered in the Kerch and Bosporus Straights. But despite the delays, the Charterers are not in a hurry to cancel voyages, as the market is slowly going up. By preliminary forecasts, the storm will go on till January 27 or 28. Strong sea winds are expected in the Azov basin on week 5, to continue then for about a week, thereby affecting the ice situation in the region. The forecasted large ice ridges will obstruct vessels entering and leaving the port of Azov.
Business activity in the Azov region has entirely recovered after the New-Year celebrations. Offers of cargoes on the market are numerous enough. The average freight rates on the Azov-Marmara route amount to 32 $ per tonne, 3000 tonnes wheat basis. Cargo volumes, which have grown lately, could have affected the increase of freight rates more considerably, but still, a lot of Charterers are facing problems related to the increase of the price on wheat basis FOB – loading port, that reached its recent 3-month maximum the previous week. For the main part, the price is being pushed up by the strengthening of the ruble versus the US dollar, along with increased domestic market demand.
On the reported week, spot tonnage has been in deficit. Most sea-river vessels plying in the Azov Sea, will be opening in early February. Simultaneous openings probably will provoke a decrease in freight rates on weeks 9 and 10.
Turkey has annulled the customs duty for barley until April and significantly reduced the import duty for wheat, which can hold the freight market at the current level in the short term and will even contribute to its rise for a while.
According to Caspian market’s participants, the drought in Iran has brought tangible crop shortfalls to the local producers. Now many Charterers are already discussing the hypothetical possibility of Iran dropping the wheat embargo, which can lead to an explosive growth in shipping in the region, but no official notice of it from Iranian officials has been received yet.