Toepfer Transport: The reaction of the European shortsea market to political issues are unclear

There is uncertainty over the markets reaction on the current geopolitical tensions. The uncertainty is especially in the Black sea. Although the European shortsea market has remained at an elevated level this uncertainty exists. Because of the average rates remained relatively flat in January, ship broker Toepfer is having concerns.

Toepfer noted in their latest report, that the day rates were still high in the European shortsea market. In January 2022, the average rate for 3,200-3,800 dwt vessels stood at €6,940, while 4,800-5,600 dwt vessels were chartered for an average day rate of €9,244. But the rates edged 1.3 percent down from December 2021.

While the rates for 4,800-5,600 dwt vessels remained flat. Compared to January 2021, day rates for 3,200-3,800 dwt vessels were up 105.7 percent while day rates for 4,800-5,600 dwt vessels operating in the European shortsea market have increased 108.3 percent.

“The January income of the European shortsea fleet remains at high levels. It is yet unclear how the market reacts on the current political challenges, especially in the Black Sea. Keeping in mind that Russia and the Ukraine represent about 30 pct of the global wheat trade, significant effects on the supply/demand balance can be expected latest during harvest season,” Toepfer Transport’s report reads.