The Azov–Black Sea market in the coaster segment during the first week of October was in the range of low-to-mid 50s (basis Rostov–Marmara).

Business activity in the region is rapidly slowing down due to the introduction of new export duties (effective 01.10.2023) on peas, chickpeas, and coriander. Most importers are not yet ready to revise contracts and purchase from Russian traders at the new price. The situation in the Kerch Strait remains unchanged: vessels under the Russian flag spend 4–20 days, while foreign dry cargo vessels are forced to wait even longer.

Major Deep Sea Tonnage Groups Still at Relatively High Rates

In early October, daily rates for handy, supra, and ultra segments remained more than twice as high as in late summer 2023. Ultramax was assessed at around USD 23,000/day (WC Africa – EC India), while handysize stood at USD 17,000–18,000/day (INTER-MED). Handysize tonnage for RUS BLACK SEA – EMED/N. AFRICA is estimated at about low 20s USD/ton.

At the same time, Russian exporters are facing difficulties due to rising duties and inability to remain competitive on FOB basis, considering state regulatory constraints. Many owners, despite this, are unwilling to cut their offers because of increasing bunker costs and non-transparent port expenses. Meanwhile, FOB wheat tenders from Romania and France are already showing prices at USD 220–250, while Russian FOB levels are higher due to floating export duties and weak competitiveness.

The Baltic market remains consistently strong. Main export routes for handymax–ultramax volumes include South America, WMED, and WC Africa, with freight rates holding at relatively high levels.

Among the main challenges that freight owners of fertilizers, metals, and aluminum will face going forward is the increase in export duties. Manufacturers whose export share exceeds 70% will no longer be able to offset the decline in export prices by adjusting to the ruble exchange rate. In 2024, non-ferrous metallurgical companies may lose 10–30% of their profits, ferrous metallurgists – 3–10%, and fertilizer producers – up to 10%.

Most likely, the market will develop along the same scenario as the RUS BS–MED trade. Business activity will slow down, freight rates will remain high, which will prevent Russian exporters from selling at competitive prices.

Sincerely, Konstantin Grinevich and Glogos Project