Bulk exports from Russia remain elevated
Bulk carriers leaving Russian ports rose in January, Lloyd’s List Intelligence data shows
EU sanctions on some bulk commodities, such as coal and steel, have failed to stop Russian exports to international markets
RUSSIA’s dry bulk exports have been keeping apace despite sanctions by the European Union on several commodities.
From March last year to December, 4,342 bulk carriers of all sizes with a total of 241.1m dwt departed Russian bulk-handling ports travelling to international markets, compared with 4,580 for 243.7m dwt in the same period a year earlier, according to Lloyd’s List Intelligence data.
While that is a 5.2% decline in terms of number of ships, effectively in the period since Russia’s invasion of Ukraine in February 2022, it represents a 1.1% decrease in dwt terms.
In January this year, 456 vessels left the ports for a total of 26m dwt, the data show, compared with 417 for a total of 22.9m dwt in the same period a year earlier, and 386 ships for 19.5m dwt in January 2021.
Following the invasion of Ukraine, the European Union imposed sanctions on Russia, including an embargo on several dry bulk commodity imports such as coal and other solid fossil fuels, steel and steel products, iron, cement, asphalt and wood, as well as a ban on crude oil and refined products. But grains, other food items and fertilisers have not been sanctioned.
With the route to the EU closed, Russia has had to find alternative buyers, namely in Asia, which has added to tonne-miles for bulk carriers, supporting freight rates.
According to Lloyd’s List Intelligence data, vessels departing Russia for India showed the biggest noticeable increase, more than doubling to 297 in the post-war period compared with the pre-war period, while a 67% increase was seen for Egypt at 115 and a 44% rise for Türkiye. Vessels heading to China meanwhile climbed 35% to 1,142.
Most of the vessels leaving Russia for international destinations from March to December were in the large handy category, followed by panamax/kamsarmax.
There has been a significant increase in the number of handymax and capesizes sailings from Russia’s bulk handling ports.
According to commodity data company OceanBolt, total dry bulk exports from Russia decreased 3.4% to 280.5m tonnes in the period from February 20, 2022, to February 19 this year, compared with 290.3m tonnes in the same period a year earlier.
Fertilisers were hit harder than coal, while grains trade increased, said the company’s co-founder Niclas Daehli Priess, adding that exports of coal, Russia’s biggest dry bulk export commodity, decreased 1.8% to 192.8m tonnes, while at the same time global coal flows gained 6%.
He said fertilisers, Russia’s second-largest dry bulk export, fell 16.9% to 16.4m tonnes, while grains, the third-largest export group, grew 13.7% to 20.8m tonnes.
Capesize and panamax volumes increased by 15% and 2% respectively, whereas supramax and handysize volumes decreased by 5% and 18%.
From March 2022 to January this year, shipments appear to have held steady at 262.1m tonnes, or 0.2% higher than the year-earlier period, according to ship brokerage Braemar, contrary to some expectations that sanctions placed on Russia may slow the country’s dry bulk exports.
On average, Russia had exported 23.8m tonnes per month of cargo on bulk carriers since the war broke out, the broker said in a note.
India and China have increased imports because Russian products, namely coal, are discounted, replacing more expensive alternatives such as from Australia.
Braemar does not expect Russia’s grain exports (mostly wheat) to be impacted that much as it was unlikely that most major buyers would sanction this trade, it said, adding that volumes had been maintained out of Russia with little disruption, totalling 28.6m tonnes from last March to January, a gain of 19.1% versus the same period a year earlier.
Russia is expecting a record wheat harvest this year, with the US Department of Agriculture forecasting exports at 43.5m tonnes for the current marketing year, 10m tonnes greater than the 2021-22 season.
Braemar is expecting to see a share of the fleet almost exclusively dedicated to performing Russian trades, a trend it has seen growing.
“Some owners look to bolster their fleet with older tonnage to take advantage of the freight premiums when calling Russia,” it said. “While this is not necessarily a ‘shadow’ fleet as described in the tanker market, it has developed into somewhat of a two-tiered market in many cases, as these vessels have rarely deviated to perform other trades.”
In January, 250 bulk carriers which discharged a Russian cargo are scheduled to sail back to the Russian ports for another voyage, it said, adding that there were now about 100 extra bulkers opting to continuously lift Russian cargoes compared with pre-war levels.