It has been yet another week of enquiry after enquiry on routes to Asia, except theres no space that can take care of all the requirements. Methanol, ethanol, ethylene dichloride and styrene are in the driving seat, and there has been a small amount of base oil towards China too.

Realistically, there is not much chance of securing space for the next four weeks or so, and the ships that will be around will be looking to charge rates in the mid $80s per metric ton. Some traders have felt such levels preclude them from conducting business – but with enquiries being pushed out even into May, it is unlikely that rates will soften.

Transatlantic rates in the low- to mid $70s/t have been reported on some of the 5,000-ton parcels of styrene being worked back to Antwerp-Rotterdam-Amsterdam from Houston. Again, this is a route that is desperately short of March space, and even April is beginning to look questionable given the heavy contract nominations that are being received, according to owners. Enquiries include phenol, cyclohexane, acrylonitrile, cumene, biodiesel, caustic, monoethylene glycol, vinyl acetate monomer, acetic acid, ethylene dichloride, vegetable oil and metaxylene.

Base oils have been mostly shipping under contractual agreements, including the 8,000-10,000 tons that was attempted last week. A small parcel of 1,000 tons of base oils from Houston to Antwerp-Rotterdam-Amsterdam ended up costing $99/t for end of March loading.

Lack of vessel space is the main obstacle to getting anything done into India or the Middle East Gulf. There are several large lots of ethanol, ethylene dichloride and caustic being worked for April, and with some luck there may be a small amount of part-cargo space left over. Rates will have to be similar to those being paid to Asia presently.

Fog in the Houston area was a periodical issue again on routes to the Caribbean, but fortunately it has not persisted. There is a great deal of demand still, from big slugs of caustic, methanol and urea ammonia nitrate right down to 500-ton parcels of solvents into Rio Haina, Dominican Republic, and Cartagena, Colombia. Rates remain strong on all fronts.

Traffic to the east coast of South America is probably the least busy of all routes out of the U.S. Gulf, yet rates have increased slightly over the past week, with improved demand for ethanol starting to show for April and May. Some base oils are being studied from the U.S. Gulf into Brazil, while cargoes of caustic, paraxylene and ethylene dichloride have been noted.

Europe

The feeling is that trade to the North Sea and Baltic has been a little less intense this week, but theres not been much change to the list of open positions so far (the yardstick by which many in the industry like to judge the state of the market). Presently, there are not that many prompt ships around, but with Easter looming, there would usually be an increase in the amount of cargoes quoted, but as it stands now there has probably been fewer requirements than in the previous week. Base oils are one of them, with fewer fixtures occurring out of the Baltic and in the North Sea.

An increase in the number of larger southbound cargoes into the Mediterranean has helped rates stabilize this week. Base oil demand in the Mediterranean is being met by availability out of the Mediterranean itself. Instead, the cargoes being seen into the Mediterranean are mostly chemicals such as paraxylene, styrene, glycols, FAME, ethanol, MTBE and sulphuric acid.

Some owners felt that there is perhaps less northbound activity out of the Mediterranean this week. As is often the case though, timing can be critical. It also helps to have a cargo that loads from a mainstream port. A 5,500-ton cargo of pyrolysis gasoline from the Adriatic Sea to Antwerp-Rotterdam-Amsterdam, for example, fixed at around 43/t-44/t, whereas a cargo of 5,000 tons of aromatics from the central Mediterranean obtained seven offers, with the lowest being around $40/t.

In terms of base oils, the Inter-Mediterranean market has been busy with some leftover deals from last week, as well as some new requirements coming to light this week. Other products have not been as active, especially vegetable oil and small parcels of clean petroleum in the Black Sea. Even FAME and caustic have been slower in the West Mediterranean. The slowdown in some commodities has, however, been offset by a small increase in demand in other grades, such as aromatics, methanol and acids – thereby keeping rates roughly unchanged.

Transatlantic demand has dipped westbound and there is still March space left uncovered. Paraxylene is one possibility that could help fill the space, and there has been some sulphuric acid, hydrocracker bottoms and a possible base oil cargo of about 9,000 tons from Hamburg, Germany, to the U.S. Atlantic Coast which was being discussed in the mid $40s/t.

There have been suggestions that the U.S. will be short of benzene towards the second half of April, and potentially it could be shipped from Europe (assuming there is product available) rather than from Asia, which would take too long to arrive. There is not much evidence of any benzene so far, however.

As expected, rates to the Far East have lifted slightly over the past week as space has filled. March is almost finished in terms of space, with several cargoes of styrene competing for the last remaining tanks. Traders have been talking about paraxylene, orthoxylene, acrylonitrile, ethylene dichloride, and methanol – and some base oil enquiries have even been seen. A large cargo of base oils is also understood to have been fixed out of Port Kavkaz, Russia, to Singapore.

A substantial number of cargo enquiries have been noted in the India and the Middle East Gulf market. March space has virtually all disappeared, and extra ships are being brought on berth to help cope with demand. Rates are strong, with levels in the $90s/t being seen for cargoes of 4,000-5,000 tons, an increase of around $10/t. Some base oils are among the cargo mix this week, with enquiries noted to both India and the Middle East Gulf.

Asia

Similar to last week, Intra-Far East routes are all pretty busy with very little space remaining in March, thanks to a large number of paraxylene, styrene and benzene movements from Korea into China. Northbound also sees a fair amount of demand, whereas southbound has been sluggish, as has intra-Southeast Asia. Base oil traffic has been reasonably busy throughout all the main areas. Rates are on par with those of last week.

The heavy volume of inbound business into Asia means that there is a lot of potential transpacific space available for Asia exports over the next couple of months. A large part is ill-suited to the parcels traffic and will probably end up in the clean petroleum market, but there will be plenty of competition for larger cargoes such as benzene. Traders have been testing the waters regarding benzene to the U.S., but the combination of stronger captive Asian demand and higher commodity prices inspired by higher crude values has curbed demand so far. Rates are potentially in the low- to mid $40s/t for 5,000-6,000-ton parcels, but competition could drive them lower.

Asia-to-Europe routes are less affected by the build-up of tonnage, and rates for parcels remain strong.

Regional trades in India and the Middle East Gulf are not quite as busy as before and rates have been under downward pressure. Iranian base oils have been moving around the region but have not yet been spotted moving into the Mediterranean.

Some believe that eastbound rates have strengthened slightly, but this looks to be temporary as theres not been a sustainable volume of demand.

A couple of small ships could look at westbound business back into the Mediterranean or Europe, but otherwise, space remains balanced. Rates are unchanged for now. However, the route may attract more vessels whose owners are alarmed at the oversupply of tonnage in Asia and who may wish to switch their ships toward the west instead.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found atwww.ssyonline.com. Adrian Brown, in the U.K., can be reached atfix@ssychems.comor by phone at +44 12 0750 7507. In the London office SSYs Ian Roberts can be reached atfix@ssychems.comor +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.