On routes to the Far East, a battle of wills is developing between owners and charterers over the direction of rates. Owners have been attempting to lift rates by 10-15 percent from the very low levels of September, when the route was heavily overtonnaged. Charterers are resisting the increases and are holding back on some of their requirements until they obtain the levels they desire. Owners, on the other hand, are aware that November is historically a very busy month and do not want to sell their space too cheaply given that charterers cannot defer their shipments for much longer. Unfortunately for owners, there are still two ships with October space undermining the bullish talk.

Transatlantic activity has melted away on the eastbound route, leaving a large number of ships to fight it out for the remaining scraps. A small amount of styrene has been noted. There is interest in moving cumene, ethanol and acrylonitrile to northwestern Europe. There was also a requirement for 1,000-4,000 tons of toluene diisocyanate, which might be in response to the force majeure that was called following the fire at BASFs Ludwigshafen, Germany, complex, as TDI is typically shipped out of Europe. Base oils have been active. Several cargoes have been looking to move back to northwestern Europe, and there was also an enquiry to ship 3,000 tons of SN150 into Livorno to augment supplies there during a refinery turnaround.

Some observers feel that demand to the Caribbean may have shrunk a little over the past week, but perhaps it might be more correct to say that the region has become home to a growing number of vessels and the imbalance of tonnage supply now makes it seem as though there is less business to go around. Demand is actually fairly normal, except that it has to be shared out more.

There are a number of ethanol requirements into Brazil, but rates on those are in the low $40s per metric ton for 10,000-ton cargoes. Beyond that, there is very little else, and owners are having a hard time filling all the ships that are on berth.

Ethanol has been the main commodity in trade to India and the Middle East Gulf this week, but there has also been an enquiry to ship 10,000 tons of base oils to India. Rates are pretty much unchanged, in the low- to mid $70s/t for 5,000-ton parcels.

Europe

Most owners in the North Sea and Baltic report that their contractual volumes are holding up pretty well. It is just the spot market that is once again regarded as lackluster. Ethanol is one of the more stimulating commodities. Base oils have seen some activity out of the Baltic, but charterers are pressing to achieve below the usual $90,000 that is paid for a typical 3,000-ton shipment.

Oversupply of tonnage has caused rates on southbound routes to cave in as well. Six thousand tons of C6 from Dunkirk, France, to Priolo, Italy, paid 26/t. The last time such a shipment was performed in the middle of June, it paid 10/t more. Looking beyond the prompt scenario, however, there are quite some enquiries stacked up that should take care of the majority of ships. Cargoes include ethylene dichloride, paraxylene, caustic, MTBE, methanol, paraffins, FAME, orthoxylene, acetic acid and ethanol, but not really any base oils.

Northbound demand has been reasonable and ships have been filling. It seems levels in the high $20s/t were not enough to entice owners to take the 6,000 tons of base oils from Italy to Port Jerome, France, and Rotterdam, and instead the cargo paid mid- to high $30s/t.

Bad weather in the Mediterranean region over the previous week caused some disruption to loading schedules for inter-Mediterranean trade, with the result that sometimes prompt requirements were difficult to cover and ended up paying a small premium above usual levels. Yet to show how fickle the market can be, similar movements performed a few days later managed to achieve knocked-down freight levels. Base oils have seen some more movements into Turkey from both the West Mediterranean and the Black Sea.

Methanol has been the latest product to grace the westbound transatlantic route, with a number of cargoes quoted but only one fixture of 15,000 tons heard completed so far at a rate of around $19/t. Pyrolysis gasoline is also another grade that has seen more action. Paraxylene in the amount of 5,000 tons from Rotterdam to the east coast of Mexico was heard to have gone in the mid $30s/t. Base oils in the amount of 1,000 tons from Fawley, U.K., to Baton Rouge, U.S., were heard fixed along with 1,450 tons of wax from Port Jerome, the combination netting the owner something like $350,000. No other base oils have been noted.

Europe-to-Far East is not exactly busy, and there is some October space still to fill, but there is also a steady trickle of business coming through. Rubber process oils in the amount of 3,000 tons from Hamburg, Germany, to Korea went for around $118/t. A haul of 11,000 tons of hydrocracker bottoms was booked from Flushing, the Netherlands, to Korea. Octene amounting 3,000 tons from Tarragona, Spain, to Map Ta Phut, Thailand, was fixed. A 1,000-ton shipment of chemicals from Rotterdam to Taiwan paid $110/t. Styrene is being attempted again.

Demand to India and the Middle East Gulf is quite strong, but this has in turn attracted a lot of ship owners, so rates vary enormously. Outports such as Leixoes, Portugal, command the higher numbers, with mid $80s/t booked for 4,000- to 5,000-ton parcels, while basic Antwerp-Rotterdam-Amsterdam loading goes for rates in the mid $60s/t. Ethylene dichloride in the amount of 10,000 tons from Stade, Germany, to the west coast of India settled at $67/t. Base oils are an integral part of the cargo mix with requirements noted from the Baltic, northwestern Europe and the Mediterranean.

Asia

Generally, activity levels across the Far East have reduced over the past week. On the intra-Far East routes, charterers are now turning their attention to cargoes from mid-November onwards. Rates have not changed. It is still possible to book 6,000-ton parcels from Korea to mid China for $17/t-$18/t. Base oils are fairly plentiful, but cargo sizes tend to be on the small side – its uncommon to see cargoes above 3,000 tons, for example.

Southbound trade is rather dull. Northbound, however, can still be relied upon to produce a wide range of products, including base oils – though rates are all unchanged. Space has tightened a bit on intra-Southeast Asia movements, and prompt cargoes can carry slight premiums.

A number of benzene cargoes have been booked for November on the transpacific run, including one cargo of 30,000 tons and another of 18,000 tons. Rates for the small lots of 6,000 tons are talked in the upper $40s/t, though owners may possibly accept the usual level of low $40s/t. The market to Europe is busier, partly with material that seems to be replacement product for lost production at the Ludwigshafen complex as well, as with various types of acid and biodiesel. Palm oil trades are a bit busier into India, and rates are nudging upwards. Space to China is a bit tighter too, but things are very much unchanged on routes to Europe and the Americas.

The regional India and Middle East Gulf market is described as very busy, with cargoes of ethylene dichloride, methanol, styrene, butac, linear alkyl benzene, paraxylene, glycols and also a few base oil cargoes originating mainly from Al Ruwais, United Arab Emirates; Yanbu and Jeddah, Saudi Arabia; and India and Pakistan, although there is a little bit of Iranian material being exported too.

Eastbound is rather slow, and there is plenty of competition for the larger lots, with numbers in the low $30s/t talked for 15,000-ton lots to China. Westbound is soft too. Base oils in the amount of 8,000 tons from Al Ruwais, U.A.E., to Le Havre, France, paid just $50/t, a lot lower than the previous shipment. A cyclohexane haul of 3,000 tons from Hazira, India, to Antwerp, the Netherlands, went at $75/t. Paraxylene at 10,000 tons was talked in the low- to mid $60s/t to the U.S. Atlantic Coast.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached at fix@ssychems.com or +44 12 0750 7507. Information about SSY can be found at www.ssyonline.com. In the Houston office, Panos Giannoulis of SSY’s Chemical Tanker Department can be reached directly at panos@ssychems.com or +1 (713) 652-270 and Jordi Maymi in Singapore can be reached at +65 6854 7127.