The Black Sea dry bulk shipping markets have resumed spot trading as the Ports of Odessa and Yuzhny saw an influx of spot grains cargo inquiry into West Africa and the Mediterranean. Ukraine's Black Sea ports officially reopened at the end of July for the first time since the Russian invasion in February.
A backlog of loaded and ready to sail ships, many of which had been stuck in berth at Odessa since the invasion, met with a fresh influx of spot cargo requirements from the large grains trading houses.
"There's an avalanche of cargo from Odessa right now," said one shipbroker source. "All the usual suspects getting involved -- Louis Dreyfus, Cargill, ADM -- basically selling ex-Ukraine to every possible destination."
Data from Platts cFlow ship and commodity tracking software from S&P Global Commodity Insights showed eight dry bulk vessels between 25,000 dwt and 80,000 dwt in size are expected to call at Odessa in the next seven days, with a further three ships expected to call at Yuzhny over the same period.
Some spot fertilizer inquiry was reported from Russian Black Sea ports, with one charterer reportedly seeking Supramax tonnage for an early September cargo from Novorossiysk to Mombasa. For the same dates, cFlow showed eight dry bulk ships expected to call at Novorossiysk, with seven at anchor at the port.
Freight levels uncertain
Freight rates indicated by market participants were both historically high and inconsistent as shipowners struggled to insure their vessels for Black Sea trading. On a time-charter basis, one Supramax near Algeria was reported to be asking $30,000/d for a trip via the Black Sea, with redelivery in the Mediterranean. By comparison, similar ships were asking between $15,000/d and $20,000/d for similar duration trips in the North Sea.
However, these rates are complicated by shipowners and operators having to pay an Additional War Risk Premium (AWRP) -- typically, around 5%-10% of the ship's hull value -- to the insurers that were willing to support their ships for the trade. While this price can be incorporated into any freight quotes and passed on to the charterer, this value and process varies from fixture to fixture.
Louis Dreyfus Company was heard to have fixed a Supramax grains cargo from Odessa to Mombasa in the mid-$70s/mt. A prompt-loading 45,000-60,000 mt (plus/minus 10%) cargo from Odessa to the West Mediterranean was heard being negotiated in the high $40s/mt, with one shipowner offering a rate for the cargo at $50.00/mt.
The longevity of the restored trade flow remained uncertain, and market participants were only cautiously optimistic about ship earnings in the region.
"I guess it's a relatively brief little spark," a London-based shipbroker added. "At the moment many shipowners are simply not willing to trade there, but as it becomes more normalized the rates will drop."