In an attempt to get oil cargoes where they are needed, the Jones Act has been suspended until Nov. 13. From a base oils perspective, the impact is negligible, since the U.S. Gulf Coast was untouched and hardly any smaller tonnage was used to move oil products along the coast. All that has happened is that as business has dried up on most routes, so tonnage has become plentiful in the region and rates have begun to look weaker in several areas.

U.S. Gulf to the Caribbean, for instance, should see some prompt open positions. U.S. Gulf to East Coast South America was already looking soft because of a reduction in the amount of contractual business being moved. There could be some discounts available off the standard $60 per ton for a 5,000 ton cargo U.S. Gulf to Santos, for instance.

Transatlantic eastbound saw none of the usual styrene and ethanol cargoes, and with several ships requiring top-up cargoes, the rate of $50/t for 5,000 ton parcels from Houston to Rotterdam is looking somewhat notional.

Perhaps the route that remains least affected is the U.S. Gulf to Far Eastservice. Demand has been reasonable in this direction, with cargoes of ethylene dichloride, paraxylene, mixed xylene and some styrene talked. There has even been mention of some base oils that may be looking to ship. Rates have edged upwards into the mid-high $60s/t for 5,000 ton parcels from the U.S. Gulf to scheduled principal ports in the Far East as owners become more bullish about prospects on this route.

Some prompt space can be found U.S. Gulf to the Middle East Gulf,, but in general we have seen fixtures being done at a higher level on this route, with 10,000 ton parcels U.S. Gulf to West Coast of India fetching around $80/t.

Europe
It is not clear why exactly, but the European markets have seen the end of yet another really quiet week. Perhaps some of the recent public holidays have contributed to the quietness, but if so it should only have a minimal impact.

Product prices for many chemicals, and base oils, too, for that matter, are perhaps considered too high, and users are looking to de-stock prior to the year-end in the anticipation that prices could or should go lower before they next restock. Whatever, the reason, the market is unseasonably slow.

There is quite a lot of open tonnage in North West Europe and the Baltic areas, and this is undermining freight rates. Even freight levels southbound into the Mediterranean are a little on the weak side, although no substantial cuts have been accorded so far.

Northbound is stable with no real shift in rates either way.

Intra-Mediterranean, however, is over-tonnaged, and some rates have been reduced, especially in the West Mediterranean, where several ships are really struggling to find any kind of employment. Even the East Mediterranean is off-key and vegetable oil demand also has slumped.

Transatlantic westbound is steady. There are a large number of vessels fully open in the area, but base oils and most chems move only in parcels, the rates for which have not changed. From Rotterdam to Houston, 5,000t parcels of benzene continue to be worked in the low $40s/t, for example.

Europe to the Far East looks fairly balanced at the moment. There have been a number of enquiries for styrene and paraxylene, for example, but most are tentative and there does not seem to be any urgency for the charterers to conclude the sales. There are however several ships with November space, and the likelihood of them filling is becoming slimmer. Rates for 5,000 ton cargoes from Rotterdam to the main ports of China have been done in the mid $80s/t, but this level could come under pressure unless more cargoes are forthcoming.

Europe to India and the Middle East Gulf is stable for now, but even here there is still November space available.

Asia
The Domestic Asia market continues to provide sufficient employment for the local fleets, as well as opportunities for vessels that are temporarily open in the area. Of course, the volume of trade is still not comparable to the peaks of the market, but overall, volumes are satisfactory.

There is still quite a lot of November demand for example on intra-Far East trade, with cargoes of aromatics looking to ship into China from Korea. Southbound sees a couple of base oil possibilities, along with cargoes of caustic, aromatics and solvents. Northbound is a little firmer, too, with rates in the mid-high $40s/t for 3,000 ton parcels from Singapore to Korea, for instance. Aromatics are leading that particular charge, with parcels of paraxylene, pyrolysis gasoline, styrene and toluene noted.

Asia Export business is steady. Cargoes such as pyrolysis gasoline have been quoted to both the United States and Europe, and there are also cargoes of biodiesel and NexBtl to both destinations, as well as a stream of small chems parcels. Palm oil markets are as hectic as ever. Some of the rates reportedly being done into India are well into the $40s/t, and demand seems to extend beyond just the Diwali Festival, which will take place in a weeks time.

Middle East Gulf to India seems a bit subdued this week. All the same, eastbound contractual demand is still pretty good, and there is not much by way of prompt open positions. But owners are extremely keen to head back for palm oils and are neglecting to chase what should be backhaul business. Rates are fairly weak on cargoes from Middle East Gulf and India to South East Asia and may also be a factor.

Westbound is not active, but there are not many vessels in position either, and just a slight increase in cargo volume could cause rates to firm.

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.