Tonnage shortage pushes up Handysize rates in the Black Sea

Spot rates in the Handysize segment are increasing due to a stable grain flow and a shortage of suitable tonnage in the Black and Mediterranean Seas.

Handysize owners continue to dictate market conditions. Charterers are paying $1-2/t more to lock in tonnage for September shipments, reportes ASAP Agri analyst and Atria Brokers freight broker Pavlo Lysenko.

On the route from Ukrainian deep-water ports to the east coast of Italy, transportation of 30,000 tons of corn is already estimated at $23-24/t, which is $2/t higher than last week. The drivers of the movement are brisk grain exports from large Black Sea terminals and a limited supply of vessels of the corresponding class on the spot.

There were no price changes in the Panamax segment: rates for corn transportation from Ukrainian deep-water ports to South China are maintained at $45–46/t. The supply and demand balance here is close to neutral, and deals are concluded “according to the latest prints”.

Coaster remains the most inert segment. Shipowners are still unable to push for an increase in rates due to the limited cargo pool in the region: transportation of batches of about 6 thousand tons of corn from the Danube ports of Ukraine to the eastern coast of Italy is traded at $32–33/t, unchanged week to week. On the small-tonnage leg, situational competition between voyages and low load of trade programs restrain shipowners’ price appetite.

Overall, the picture for the week looks like this: Handysize is premiumized by a tonnage deficit for an active grain flow, Panamax “holds parity” in the Far Eastern direction, while Coaster reflects a local cargo shortage on the Danube. If the pace of shipments from deepwater terminals continues, Handysize may further tighten in the coming days, while changes in the “fire” segment will depend on the emergence of additional short contracts.

As reported by USM, Ukraine has exported over 5 million tons of grain since the beginning of the new season.