Chartering market at hand: coasters and minibulkers // week 21

No light in the end of the tunnel can be seen for small-tonnage shipping market - unless we consider the upcoming start of a new grain season in July as such. “We still see plenty of open tonnage around, with owners rating some cargo offers even below than initial charterers' targets,” a Ukrainian broker commented. The number of 2-12k dwt vessels open for the next couple of weeks exceeds 350 units only in the Black Sea , Marmara Sea and eastern Mediterranean (including more than 200 ships of 3-6k dwt). Despite the fact that TCEs fell below OPEX levels back in early May, many owners continue to accept further cuts out of desperation; especially this applies to owners of overtonnaged non-IACS vessels, who are actively competing for Ukrainian grain. Over the week, freight rates have dropped by another $0.5-1.5/t in Black Sea, while the Mediterranean Sea has only shown a decline within $0.5/t on some routes.

As expected, trade has declined to a minimum in North Europe during the industry events in Rotterdam. With almost no new deals, indicative rates stay at last week's levels, although charterers’ pressure has increased.

Sea-river owners working in the Azov Sea have failed to build on last week's success, when a timid uptrend was reported. Export sales of Russian wheat are sporadic due to rising prices on the domestic market, while demand for other types of grains, as well as for coal, is steadily low in Turkey. Owners are supported only by quite brisk shipments to the Kavkaz roads. Freight rates are virtually unchanged this week, with RV TCEs for sea-river vessels still slightly exceeding the OPEX level, which can be considered a great success in view of the situation in the seagoing sector.

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Most owners and brokers have already accepted the fact they will not see any growth of activity and freight rates in the nearest month. Export prices for wheat and corn are increasing amid fears about new crop volumes, which is not favorable for current sales. Among positive news for the freight market, we can note only some trade upturn in urea and AN segments, as well as a slight recovery of demand for Black Sea square billets in Turkey. However, this will hardly override the impact of unfavorable grain market conditions. In North Europe, trade will certainly pick up next week with the return of many players from the BreakBulk; however, this will at best help ship owners keep freights stable.

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

Rates going down as Black Sea small-tonnage market still cannot find bottom

Mediterranean Sea coaster market dominated by pessimistic sentiment

Small-tonnage traffic quiet in North Europe

Azov Sea market moving sideways, with no clear direction so far

Click here to learn Coaster freight assessments on main trade routes