Chartering market at hand: coasters and minibulkers // week 16

The small-tonnage market is witnessing another sad week for coaster owners since even timid hopes for a pre-holiday recovery failed. Things are even worse: market activity has shrunk to a minimum all across Europe, with many players already being out for Easter holidays (if not physically, then psychologically for sure). The list of open 2-12k dwt vessels has gotten longer everywhere except the Black and Baltic Seas. Meanwhile, the most noticeable increase can be seen in the Continent/UK, where the vessel count has nearly doubled; the number of open ships has increased from 180 to 200 units in EMed, Marmara and WMed.

The Black Sea market has shown the most considerable slowdown in cargo traffic from EU ports and Ukraine, and only a slight reduction of tonnage list (in particular, this applies to 4-6k and 10-12k dwt ships) allowed to avoid the rate cuts. The offer of steel products and fertilizers has decreased in the Mediterranean Sea , while freight rates have dropped by $0.5-1/t on some routes. Note that weakening of the dollar against the euro allows charterers to insist on lower freight rates in the European currency.

In the Azov Sea , lack of grain shipments towards Turkey continues to put pressure on freights. Thus, charterers have managed to lower rates by another $0.5-1/t during the week despite the fact that estimated TCEs for sea-river vessels were not reaching the OPEX even with minimal ballast trip. The Caspian Sea market remains weak, and freight rates most likely reached their bottom a little earlier.

As for the North European market, the surplus of 2-4k dwt vessels has become very acute, and competition among owners is extremely high at the moment. “It's a bloodbath,” a local broker commented laconically. In these circumstances, ship owners are increasingly making concessions. According to ISM estimates, freight rates have sagged by €0.5-1.5/t in the region.

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The market is likely to remain inactive next week. “The market should get softer with the current holidays and most probably in May as well,” one of the major EMed charterers shared his thoughts. “Switching to more expensive fuel (ULSFO or MGO), the rates probably will hold steady in Med, but owners will earn less,” a Turkish broker mentioned. The market should hardly expect a significant recovery even upon the return of players from the Easter holidays. The shortage of corn offers from Ukrainian exporters is pushing corn prices up, which will hardly contribute to brisker sales. Demand for wheat and barley will probably remain weak in the Mediterranean countries until the end of the season. As for other commodity segments, demand for square billets has perked up in Turkey, but local buyers are mainly looking at Asia. Speaking off the fertilizer segment, urea demand remains weak in the EU, with players only noting healthier demand for AN and phosphate fertilizers.

Check latest fixtures, ideas and news from coaster market via following links:

Black Sea small-tonnage market steadily sluggish and overtonnaged

Activity slackened again on Mediterranean coaster market

Azov Sea market keeps softening

North European coaster market affected by Easter break

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