Transatlantic eastbound has seen freight rates increase into the low $50s/ton for 5,000 ton parcels from Houston to Rotterdam, and high $50s/t for the same products out of Lake Charles and other unscheduled ports. Styrene is the hot product, and a lack of prompt space is the main reason why there have not been more fixtures.

Base oil demand is one of the driving forces as to why freights have increased on the U.S. Gulf to India-Middle East Gulf route. Owners are now seeking levels in the low $90s/t for 5,000 ton parcels from Houston to Mumbai while 3,000 ton parcels of base oil are looking to achieve very high $90s/t.

U.S. Gulf to the east coast of South America is another route on which base oils have been circulated. Caustic is however the principal commodity heading southbound and commands rates that are substantially lower than those for base oil. A 5,000 ton parcel of base oils from Houston to northern Brazil, even without heat, could easily end up costing a figure in the $80s/t, for example.

U.S. Gulf to Caribbean is picking up on the parcels trade, and space has become scarce. A small 1,000 ton parcel of base oils from Houston to the inner Caribbean, such as Dominican Republic, could cost around $70-$80/t.

U.S. Gulf to the Far East has been fairly tame this week, probably because almost all the existing September space is full. Cargoes of styrene, glycol and methyl methacrylate have been seen but stand little chance of fixing unless extra ships are brought on berth, and of course at rates that are higher than before.

Europe
The end of the month brought forth a number of prompt requirements in the North Sea and Baltic. The majority of requirements have been products that are linked to gasoline, such as ethanol, fatty acid methyl ester, MTBE, alkylate and reformate. There are, however, so many prompt ships open in the area that freights are unlikely to change.

Southbound into the Mediterranean is looking in better shape than a couple of weeks ago, but the number of large ships on berth has been something of a surprise, and until these ships are full then rates are not likely to go up. Base oils have been noted on the route into the Mediterranean, but concerns about the Turkish economy and the weakened exchange rate against the dollar might occasion fewer shipments as a result.

Northbound has been dull, and several ships are actively seeking completion cargoes. Benzene has been discussed from the Black Sea, methanol from Libya, ETBE from France and base oils from Italy. Intra-Mediterranean markets are fairly busy, but a large proportion of the cargoes are small – i.e., under 4,000 tons, whereas many of the open ships are over 6,000 tons in size and unwilling to parcel up for fear of not filling out. There are a number of simple ships that are open in the Black Sea and which would probably perform a cargo of base oils from Black Sea to Marmara for around $70,000, on the basis of 3,000 to 4,000 tons.

Transatlantic westbound is not exciting, but there have been a number of paraxylene requirements to the U.S. Atlantic Coast that have been talked at around $47/t for 5,000 ton quantities. Toluene and orthoxylene have been fixed across too, and there are still some outstanding requirements. Space has however thinned out, and owners are nudging freights back up.

Europe to Far East is reported to be seeing a little more activity. For example, 5,000 ton cargoes of paraxylene are being talked in the low $90s/t from Rotterdam while from the Mediterranean, 5,000 ton base oil cargoes were booked to Singapore in the high $80s/t. Europe to Middle East Gulf-India is stable, with some base oil requirements noted.

Asia
There have been a large number of prompt open positions dotted around the domestic Asia scene this week as owners have really struggled to pull together sufficient cargo to fill their ships. Very little new business has been recorded heading into China on the usually busy trade lanes out of Korea. A few small base oil requirements have been seen within Northeast Asia, but the majority of them have been term or contractual movements. Base oils have been showing from Southeast Asia to diverse destinations such as United Arab Emirates, China and Bangladesh.

On the Asia Export leg, traders have been checking freights on base oil cargoes from Korea to Turkey. For such a cargo, there are a number of potential candidates, but so far the levels mentioned have still been in the $110/t range. But with palm oil demand dropping away, the benchmark freight levels could come off and the base oil numbers could soften too. Nothing special has been taking place in the India-Middle East Gulf markets, and rates are judged to be unchanged.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached at fix@ssychems.com or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at fix@ssychems.com or +44 20 7977 7560.