The route into Asia continues to receive plenty of interest for remaining December space, but there is virtually nothing left, forcing much of the demand back into January. Yet rates continue to rise, although they are still some 10 percent to 20 percent lower than at this time last year, underscoring the lack of confidence among owners to push rates up faster. Aromatic cargoes of 10,000 tons from Houston to China are being done in the mid- to high $50s per metric ton and possibly $60/t for specific ports. Benzene is the latest product to join the fray, which already includes styrene, glycols, phenol, acrylonitrile, ethylene dichloride, ethanol, paraxylene and methanol, but no base oils.

Transatlantic demand continues to pick up and space has become tighter, possibly because scheduled vessels are heavily engaged in contractual volumes. Rates are trending upward. Biodiesel amounting to 3,000 tons from Houston to Rotterdam, the Netherlands, paid $68/t, for example, although not all owners are confident of achieving such rates. Another example is of 3,000 tons of acetic acid from Houston to Antwerp going for $55/t. No new base oil requirements have come to light.

U.S. Gulf-to-Caribbean space has become tighter too. A cargo of 13,000 tons of vegetable oil, for example, had to be divided up and was eventually carried on three smaller vessels, for example. Glycols in the amount of 2,000 tons from Coatzacoalcos, Mexico, to Houston fixed at $48/t, which is a considerable sum for a short trip. Fog has started to become a daily occurrence in the Houston area, and on Monday morning, for example, there were 32 inbound vessels and 29 outbound vessels forced to wait for the fog to lift. A base oil shipment of 3,400 tons was quoted from Houston to Mexico – either Veracruz or Altamira – this week.

Further shipments of ethanol have been concluded from the U.S. Gulf into Brazil for December. There has also been interest in shipping ethanol into Peru and Jamaica. Several methanol possibilities have been attempted and a couple of shipments of ethylene dichloride have also been quoted from Plaquemine, Louisiana, to Brazil. Some small parcels of urea ammonia nitrate are looking for freight from Donaldsonville, Louisiana, into Brazil and Chile. Rates discussed are all pretty similar to those done on earlier shipments.

According to owners, base oils are still under discussion on the route into India and the Middle East Gulf. Rates are generally pretty flat on this service, but there is still December space around which might mean that 5,000-ton parcels from Houston to Mumbai could end up in the high $60s/t. Ethanol is still fixing well on the route, but ethylene dichloride seems to have lost out to supplies from Europe and the Middle East Gulf.

Europe

In the North Sea and Baltic Sea regional markets, there ought to be many more spot requirements flying around at this time of the year, when owners would curse having so many contracts to perform that they would be missing out on all the juicy spot market liftings that would be paying premium rates. This is not the case this year. Curiously, there are undeniably not that many idle ships around either, yet spot market levels are said to be highly competitive. Wax, for example, in the amount of 1,000 tons, from Port Jerome, France, to Tees, United Kingdom, reputedly paid just $50,000, despite requiring direct sailing. The same rate was paid for 1,000 tons of chemicals from Antwerp to Le Havre, France, again with the stipulation of direct sailing. Clearly there is not much fight left in owners to try and contest the rates. Base oils have again been reasonably prolific, with cargoes into and out of the Baltic, as well as along the coast.

It is not particularly busy southbound into the Mediterranean, yet most ships are indeed finding cargoes, whether directly into the Mediterranean, or in some instances, they have taken cargoes that will keep them within the North Sea. As a result, a couple of benchmark cargoes were booked at slightly higher freight levels, although the cargoes of FAME that were chartered into the western Mediterranean were mostly at unchanged levels.

Freight levels have been largely unchanged on northbound routes. Aromatics in the amount of 6,000 tons from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam went for 30/t, for example. A couple of spot base oil shipments have been conducted, but these too have also been at routine levels.

The inter-Mediterranean market has thrown up some very mixed results this week. A couple of very similar shipments of biodiesel have produced rates that are as much as 10,000 (U.S. $10,620) apart, simply because one requirement had flexibility on loading dates and the other did not. Ostensibly, the Mediterranean market has not produced anything particularly exciting, yet the vast majority of ships are able to find employment. Some base oil activity has been noted into Turkey.

It is on the deep-sea routes out of Europe where the main excitement has been over the past couple of weeks. Transatlantic westbound has been busy with a mixture of contractual and spot movements to the extent that December space is getting quite scarce. A cargo of 5,000 tons of paraxylene from Rotterdam to the U.S. Atlantic Coast entered the market several days ago and would have been snapped up immediately. Instead, it has taken some time to find a suitable candidate and at freights that are higher than before. Owners are talking numbers very close to $40/t these days, having managed to bring them up from the mid- to high $20s/t. A small parcel of base oils quoted from Rotterdam to Houston looks like it may be one of the Russian high viscosity grades.

Demand for space on routes to the Far East has actually surpassed the amount of scheduled space left on berth for December, resulting in several extra ships squeezing on berth to take advantage of the action. Styrene is particularly active, but there has also been requirements of benzene, paraxylene, acrylonitrile, glycols, butanols, 2-ethylhexanol, phenol, cumene, toluene and mixed xylenes. Freight rates remain firm.

The market into India and the Middle East Gulf is also brimming with cargoes, and here too a number of additional ships have been fixed to help cover all the demand. Some of these ships are taking parcels of acrylonitrile and hexane from the Black Sea and have several tanks free, in case there are any base oils to move.

Asia

The market within Asia has been pretty busy through December, and it would probably be correct to call it a yearend rush, except that nobody actually refers to it as such. In terms of vessel space, there is precious little left for December, apart from some larger ships that could be worked should there be any possible combination cargoes. The week has seen commodity prices spike in Asia for products such as benzene, toluene, glycol, styrene and methanol. Stocks are low in general for many commodities and restocking has to be performed prior to the lunar holidays. Throw in bad weather at this time of year with plenty of port delays, plus colder weather increasing the demand for ships to transport heating oil and finally a stronger palm oil market that is taking away tonnage, and it becomes a recipe for a toxic cocktail that could easily cause freights to soar. It is probably only because there has been constant downward pressure on freights for the past nine months that owners lack the confidence to challenge existing freight levels. Small rate increases have been recorded this week, particularly out of Southeast Asia, where 3,000-ton parcels to mid China are now fetching $42/t-$44/t. Base oils have again been very active throughout Asia.

The shortage of benzene on the transpacific east route is causing problems for most owners. There is quite some December space left, but the differential between the U.S. and Asia cannot be met by freight alone. Traders have looked at both paraxylene and mixed xylenes from Korea to the U.S. Gulf, but like benzene, it will be difficult to bridge the gap and conclude any sales. Sulphuric acid to Chile is perhaps an alternative. Benzene has been seen for January, but it is just tentative at this stage. Freights are weak, and maybe 10,000-ton parcels will attract levels in the mid- to high $30s/t. But even at those levels, it will be hard to see what commodities would make sense to move.

The market into Europe sees space from the main ports in Korea and Taiwan, but once outports in China and the Mediterranean come under discussion, the amount of available space shrinks rapidly and freights can be substantially higher than Korea-to-Rotterdam numbers, for example. In such circumstances, it is possible that base oils will be attempted.

The regional market between India and the Middle East Gulf is really active, with more cargo than there is available space for December. This is causing rates to increase. Base oils are active, with shipments from Iran, the United Arab Emirates and the Red Sea.

Eastbound is also considerably firmer. Rates for 5,000-ton parcels from the Middle East Gulf to China are slated to be in the low- to mid $50s/t but December space is so tight that much higher levels have been confirmed fixed.

Westbound is not particularly busy, but nor is it faltering. The fleet of small ships that was available have mostly fixed back into the Mediterranean from the India/Middle East Gulf region, Iran and the Red Sea. The owners clearly have an appetite for this business because a whole bunch have just fixed back into the region again.

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