It has been a sedate start to the year in Europe and the Americas, whereas the market in Asia continues to record high levels of demand.
U.S. Gulf of Mexico
The spark behind the U.S. market fizzled out during the holiday period and has as yet failed to re-ignite. The last day or so has produced a small number of cargoes on the Gulf to Far East route, which is at least some improvement on the beginning of the week. Styrene, ethanol, glycols and some aromatics such as paraxylene have started to show, but it is still early days and there is open tonnage within January. Rates are talked in the mid $70s/t for 5,000 ton parcels from Houston to scheduled principal ports in the Far East.
The Gulf to East Coast South America route is also seeing some action, albeit primarily large slugs of ethanol. There are some smaller parcels that need to be shipped, such as base oils and caustic but owners may opt for full cargoes of ethanol, which might make it awkward to get these smaller parcels covered.
Transatlantic eastbound is very thin. A couple of traders have been trying styrene possibilities to Northwest Europe, but there is not much else out there. Freights are notionally around $45/t for 5,000 ton lots from Houston to Rotterdam, and time will tell whether they weaken further.
The Gulf to India and the Middle East Gulf region has a selection of scheduled and outsider tonnage on berth in January. Ethanol is being talked into the Middle East and could produce some interesting positions for base oils as completion cargoes.
Europe
European coastal markets have emerged from the holiday season with plenty of open ships in prompt positions. In general, owners are trying to dig their heels in and most refuse to accept lower freights, but such is the magnitude of open tonnage that some owners will certainly capitulate if it means securing employment of a week or longer.
There are possible bargains for those wishing to ship base oils southbound into the Eastern Mediterranean, for instance, since at least three or four ships are looking for completion cargoes. Intra-Mediterranean cargo volumes also are depressed, and there are all manner of ships open within the region.
Transatlantic westbound however is reasonably busy. Traders expect more benzene and pyrolysis gasoline to ship across, and there have been cargoes of paraxylene, caustic, urea ammonia nitrate and base oils in addition. When rate levels are discussed they are those from the holiday period, when low $40s/t were achievable for 5,000 ton cargoes from Rotterdam to Houston. A bit more demand however could flip them into an upwards curve.
Europe to the Far East is starting to see more interest in aromatics, styrene, glycols, acrylonitrile, phenol and some base oils. January space is readily available, however, and as with the transatlantic route the rate structure is based on the holiday period, and as such owners are talking around $90/t for 5,000 ton parcels from Rotterdam to scheduled principal ports in the Far East.
There has been some interest in chemical parcels into India, too. At this stage, base oils are not workable, in spite of higher prices reported in India. Rates are typically mid $70s/t from Antwerp-Rotterdam-Amsterdam to the west coast of India.
Asia
The domestic Asia picture is the same as it was before the holidays. Prompt space is scarce, and charterers frequently have to change loading dates, or widen the laydays canceling period in order to capture any open space. This seems especially so on the intra-Far East service. Here, in addition to the usual aromatics cargoes into China, there are now more oil cargoes hoping to steal some of the open tonnage and the competition for vessel space means that owners can sometimes ask for higher freights.
Even the market out of Southeast Asia is busy with plenty of requirements going north as well as within Southeast Asia.
Palm oils represent an attractive alternative to chemicals and base oils, and rates into China and the Indian Ocean are firm amid strong demand.
Asia Export demand is fairly solid, and traders see value in exporting benzene to the United States. There are some base oils talked about on this route, too, but levels will be higher than the $50s and $60s/t that the large slugs of benzene command.
The Middle East Gulf and India region took a breather at the end of 2012. Until then, eastbound traffic had been spectacular, but the start of the year has not yet brought about a resurgence in trade. Rates may be down somewhat from the $50s/t that were being accomplished for large lots from the Middle East Gulf region to scheduled principal ports in the Far East.
Westbound rates are steady, being in the low $100s/t for 2,000ton parcels from the west coast of India to the Mediterranean and Northwest Europe.
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.