By the mid of the February, market participants regularly marked the smooth growth of the freight level on the Azov region in all general shipping routes. Freight cost had increased by 1$ in comparison with the level of 5th week route amounted to 35 $ per ton basis voyage ex Rostov to Marmara with wheat.
Such movements could be explained by the fact that Charterers experience a shortage of spot tonnage, since a significant part of the fleet presently occupied at the discharge in Turkish ports and most vessels shows the opening dates for the end of February – early March.
An assured increase of the cargo flow supports a slack but steady rise of the freight rates in the Azov basin.
The forecasts deterioration of weather in the Azov area last week were justified: a severe intense squally wind led to a decline of the water level to 3 meters in the ADMC. Ships, entrapped there, is forced to idle in anticipation of water level would go up, leading to queues for berthing and subsequently to the demurrage accrues. A significant amount of tonnage has accumulated in the Kerch Strait area, part of which is waiting for an ice-breaker assistance to the ports of loading.
Despite the improvement of the ice situation in the Azov basin – de-facto the inner area of ports of Rostov and Azov are ice-free – the ice class restrictions remain in-force. But as soon as the requirements for ice class are officially lifted, there will be a relocation of the fleet from other regions, which shall weaken the level of freight rates.
It is expected that in late February – early March, the abolition of ice restrictions will revered the fleet’s number in Azov to its previous level.
Iran will celebrate the New Year from 15.03 to 22.03. Russian Exporters are trying to full fell their obligation of the contracts and don’t make new deals before the end of Iranian vacations to avoid vessel’s delays at discharge ports and connected losses.
After the holidays, the purchase price for grain may decline, due to weekly trader’s timeout which could be the reason of the future freight rates changes in the area.