+380 67 625 91 65The market for small tonnage vessels in the Black Sea is facing serious pressure. Despite the start of grain season, shipowners did not see expected growth in freight rates – increase amounted to only $0.25-0.5/t. This is below expectations and is due to low market activity and a limited supply of grain cargoes, which are insufficient to support stable growth rates. The main problem is the shortage of cargoes for transportation. Grain offers are weakly received, which does not allow shipowners to improve their financial performance. In addition, other types of cargoes such as steel and fertilizers are almost absent from the market, which aggravates the situation. Demand for grain transportation remains unstable, and high competition forces shipowners to accept low rates. No significant improvement in the Black Sea market is expected in the coming weeks, although there is hope for increased transportation volumes with the start of the corn harvest in September-October. However, lower crop forecasts in Ukraine cast doubt on the growth of export shipments.
In the Mediterranean, the situation also remains difficult. The main problem is the lack of cargo, which puts pressure on freight rates. Despite requests for the transportation of mineral and steel products, the market remains sluggish, and competition among shipowners is intensifying. The transportation of fertilizers, such as urea, has virtually stopped, exacerbating the situation. Shipowners are looking for cargo across the region, but there is not enough of it, forcing them to accept low rates and operate at the margins of profitability. For example, the transportation of 5,000 tons of cement from the Mersin to Casablanca costs $35/t, which is only slightly higher than operating costs. The outlook for the Mediterranean remains restrained, and no significant improvements are expected in the near future.
The market for small tonnage vessels in the Azov Sea shows signs of stabilization, but is far from optimistic. The main factor restraining the growth of rates is the excess of vessels with insufficient cargoes. Despite some growth in demand for grain transportation, it did not lead to a significant improvement in the situation. For example, rates for the transportation of 3,000 tons of grain from Rostov to Marmara are at the level of $22.5-23.5/t, which is equivalent to $0.9-1.2 thou. per day. Deals for the transportation of 5,000 tons of grain from Yeisk to Marmara are concluded at about $21/t. Shipowners are forced to agree to minimum rates to maintain activity. Demand for coal transportation remains stable, but does not show significant growth. Forecasts for the Azov Sea remain cautious. The market situation is unlikely to improve in the coming weeks, excess tonnage will continue to put pressure on freight rates.
