+380 67 625 91 65The market for small tonnage vessels in the Black Sea remains stable, but the situation remains difficult even after two months of the new grain season. Freight rates continue to decline amid weak demand for the transportation of grains, such as wheat and barley, which are selling slowly. This week, rates for a 6,000 tons wheat shipment from Izmail to Alexandria are around $20 per ton. However, shipowners are seeking at least $23 per ton, equivalent to $1.5–1,600 per day. Steel and fertilizer shipments also remain at low levels, which puts additional pressure on the market. As a result, freight rates in the Black Sea fell by $0.25-1 per tonne by the end of the week, and shipowners have little chance to raise prices. Forecasts for the coming weeks remain cautious, despite shipowners’ expectations that fall may bring improvement. However, many experts doubt the significant growth in demand.
The market for light tonnage vessels in the Mediterranean Sea continues to face serious pressure. This is due to weak demand for transportation and a surplus of available vessels. Fertilizer and steel transportation is one of the few cargo categories supporting the market. For example, the discussed rate for the transportation of 2,800 tons of fertilizer from Nea Karvali to Izmail is about $22 per ton. Nevertheless, excess tonnage in the Mediterranean Sea is increasing pressure on freight rates, forcing shipowners to reduce prices in a highly competitive environment for limited cargoes. Rates for the carriage of 5,500 tons of barley from Rijeka to ARA countries range from €40 to €45 per ton, generating revenue of about $6k per day on a single voyage. The outlook for the Mediterranean remains negative. No significant increase in demand is expected in the coming weeks, which will continue to create difficulties for shipowners.
The freight market in the Sea of Azov also remains stable. However, it does not show significant growth due to limited cargo volume and excess tonnage. Despite steady demand for grain transportation from Russian ports, freight rates remain at a level that only covers operating costs. Some shipowners are trying to increase rates using the limited supply of vessels, especially on short routes. For example, the transportation of 5,000 tons of wheat from Azov to Egypt is discussed at a rate of about $40 per ton, which is an exception against the background of general market weakness. Forecasts for the Sea of Azov are subdued. And although the market is showing signs of activity, significant growth in freight rates is not expected in the coming weeks.
