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Bulker owners avoid Black Sea amid war escalation

Owners say they will avoid the area following reports that some ships have been shelled in recent days

Bulker owners shun Russia, with some trying to unwind positions as the situation surrounding the military incursion into Ukraine unfolds

BULKER owners are trying to avoid the Black Sea area as the conflict rages between Russia and Ukraine. 

Some are also avoiding doing business with Russian companies in light of sanctions.

Denmark’s Norden said it was “saddened” to witness Russia’s military incursion into Ukraine, adding that its thoughts were with the people in the region.

“We have adjusted our business to align with the newest sanctions and have furthermore decided that as of today, Norden will not take in any new Russian business nor call at Russian ports. We will continue to fulfil our existing contracts, as we are legally obliged to do.”

Another Danish company, Lauritzen Bulkers, said it had decided to stop all trading in and out of Russian and Ukraine ports.

It also stopped entering new deals with Russian companies, and this “will be maintained for the time being”.

“We are slowly getting out of existing deals, but still have funds outstanding with Russian accounts from deals done before the crisis,” it said. “This is of course making our trading difficult, but more importantly, a terrible humanitarian crisis that is 100% man-made and completely unacceptable.”

Norway’s Golden Ocean said it had only one vessel loading in the southern part of the Black Sea, and all going well, will complete loading later in the week. “At this point, there have been no disruptions or threats to the vessel or its crew.”

“Our exposure to the Black Sea is mainly spot-oriented, but for the time being, we are avoiding the area and are finding alternative employment,” it said, adding that although it has not been necessary to re-route vessels or cancel contracts, it was monitoring developments “around the clock”.

Germany's Oldendorff said it had one bulker at Odessa port at the start of the war, which safely sailed away. It has had to make other plans for ships planning to go to the Black Sea.

“Most owners and operators will want to stay well clear,” said a spokesman. “Insurance will make trade to that area prohibiting.”

A US-based owner of smaller-size bulk carriers said it will avoid the region, which only represents a fraction of its business, at about 3% of traded volumes per year.

Meanwhile, there were reports that some bulkers were hit by shelling in the past week, prompting flag states to issue advisories strongly encouraging all vessels to avoid transit in Ukrainian and Russian waters in the Black Sea and Sea of Azov.

Flag states have also advised vessels in the Black Sea to increase security measures and conduct voyage-specific risk assessments and “exercise extreme caution when operating in these areas”.

While spot capesize rates took a knock at the close of trading on February 28, handysizes showed the biggest gains.

Average capesize time charter slipped 12.5% to $13,414 per day from a week ago and 26% from February 23, according to the Baltic Exchange.

While panamaxes dropped 3.7% to $23,389 from a week ago, rates are in fact 6.5% higher than mid-week last week.

Supramaxes gained 3.7% to $26,711, while handysize rates were up 7.6% from a week ago, Baltic Exchange data shows.

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