Danube freight market recovers after the post-attack chaos

Activity in the key southern shallow water ports along Ukraine's border with the Danube has started to recover, with signs of more freight indications being discussed in the market, trade sources have told Agricensus. 

The news follows days of chaos and the suspension of activity in the region following Russian drone and missile attacks on the shallow water ports, with the Odesa region in particular facing consecutive nights of attacks.

The attacks provoked a mood of panic among market participants, driving wheat prices higher globally as the trade feared that Ukraine's sole remaining export route via the Danube ports could be cut off, while shipowners were asking to remove their vessels from the region amid increased risks.

However, trade sources have said that after the initial chaos - and the loss of a number of owners that have decided to abandon operations in Ukrainian waters - there remains enough freight operators for the hub to remain operational.

After several days without any freight indications, offer levels were said to have returned although the early indications heard on Wednesday were coming in around $20/mt higher compared to the previous week.

“Owners are speculating and trying to increase freight. All the recent events contribute to this. They want premiums for risks,” one freight broker said.

“They believe in the increase [of freight rates] so much that they are ready to wait in the spot and are in no hurry to offer [lower],” he added.

But by Thursday, traders said they could already find more competitive prices, with some vessels being quoted at levels only $3-5/mt higher than levels heard last week.

However, the gap between bid and offer levels was said to be wide, but traders said it was still possible to find vessels.

Sea-river vessels booked into the Turkish ports of Marmara were said to be $3-4/mt higher than the current levels of $32-35/mt, while coasters into Egypt were heard at an increase of at least $5/mt over the$45/mt paid, according to the freight analytical agency ISM.

For barges into Constanta, offer ideas were also seen around 5/mt up from last week at around $35/mt, even though there were also offers at much higher levels.

However, trade sources warned that should the intensity of the attacks pick up again, it is possible that price increases would not be quite as limited.

“If the attacks are repeated, then the trade will be messed up. But, for now, the trade is afraid, but the barges keep moving,” another freight broker said.