Dire Conditions Bedevil Black Sea & Azov Coasters (31 Aug 2020)

Hopes that late summer would see a return in de­layed demand throughout the Azov and Black Sea markets have so far been left unfounded. Grain pro­ducers are facing the continued paradox of higher prices countered with lower demand and, thus, con­tinued delays from otherwise dependable buyers. One Azov-based owner has identified a 60% dis­count in current rates (ex-Azov shallow ports) vs. a year ago while the same are some 50% lower than the running five-year average. This situation is clear­ly unsustainable, but owners are being forced to accept unacceptable conditions amid an unprece­dented demand shock and global shutdown. With standard Azov grain rates now merely US$ 1-2/mt higher than their inter-Black Sea counterparts, pro­fits are razor-thin if even justifying the term profit. Grains of 5,000mt (46′) can fetch about US$ 15/mt from Azov to Marmara while the same cargo is unlikely to get much higher than US$ 12-13/mt ex-Kherson to Marmara. Coal trades, while sometimes able to fill the gap of missing grain business, are largely fetching even lower levels with US$ 11/mt on 5,000mt (43′) from Rostov to the Turkish Black Sea. SBM of 3-4,000mt (56′) has been fixed for US$ 12-13/mt ex-Niko to Poti, which represents the standard kind of business that owners are typically able to secure in the Black Sea at the moment.

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