It has been a repeat performance of the previous week in which the Americas and European markets have been totally deflated with minimal new business reported. Only in Asia are there faint signs of a pulse.
U.S. Gulf of Mexico
Overall, the picture of trade out of the United States is bleak, with further reductions in freight rates reported. Perhaps the U.S. Gulf to Caribbean market registered a slight increase in volume, but not nearly enough to make a dent in the total number of idle ships in the region.
Space is tight on the U.S. Gulf to East Coast of South America route until late July because of strong contractual demand that has almost entirely filled all the scheduled vessels. A certain amount of spot trade revolves around ethanol at the moment. Some of these cargoes are large enough to draw extra tonnage on route, and as soon as that happens there could be some opportunities to help fill ships with base oils.
Rates for 5,000 ton parcels for Houston to Santos, Brazil, are typically in the mid-high $70s per ton at present.
Northbound from Brazil is also busy with ethanol into the United States. However, there are open positions in Brazil that could benefit from a 5,000 ton completion cargo. There have been discussions on exporting base oils from Brazil to the United States, in which case some fairly attractive rates could be negotiated.
Transatlantic eastbound is desperately quiet again. Almost all the styrene and ethanol cargoes have disappeared, leaving just some small lots of biodiesel, solvents and phenol. Rates are dropping into the $40s/t for 5,000 ton parcels from Houston to Rotterdam.
U.S. Gulf to Far East trade has dropped away further due to the complete absence of spot business. Traders did take a look at some mixed xylenes into Asia, but it was all withdrawn when it became apparent that Asian mixed xylenes prices were lower than those in the U.S. Gulf. For prompt loading, it is now possible to achieve mid $50s/t for 5,000 ton cargoes for Houston to scheduled principal ports in the Far East, only made possible by the substantial decrease in the bunker fuel price to $545/t FOB Houston.
Europe
With contractual demand at a low level in the North Sea and Baltic, owners are concentrating on picking off what spot volumes they can, which has in turn led to some pretty competitive rate levels being reported.
Southbound into the Mediterranean has begun to see open positions appearing, aided by Turkish authorities who have clamped down on base oil and white spirit imports. It has to be said that some base oils do continue to be quoted and fixed into Turkey, but not to the same degree as before.
Inter-Mediterranean trades, too, have backed down and open space can easily be found.
Transatlantic westbound has seen interest in pyrolysis gasoline, caustic, urea ammonia nitrate and sulphuric acid in particular. There has also been some interest in shipping base oils into the Caribbean, Mexico and West Africa. Freight rates are perhaps slightly lower than before, with $40/t considered workable for 5,000 ton cargoes for Rotterdam to the U.S. East Coast these days.
Europe to the Far East is fractionally busier than the previous week, aided by the return of some paraxylene and styrene cargoes. There is an assortment of other small parcels, too, most of which tend to be more specialised grades. Some base oils have been fixed from the Black Sea and Antwerp-Rotterdam-Amsterdam into the Far East but do not seem to be setting a new trend. Instead, there are more base oil opportunities being discussed into India and the Emirates, but the main products on these routes tend to be vegetable oil and phosphoric acid.
Asia
The fresh run of business that commenced over the past week or so within the Domestic Asian market has continued through to this week. Total volumes are far short of what has been seen when the market was at its peak at the beginning of the year, but it is nonetheless encouraging to see signs of renewed activity.
Aromatics are at the fore as usual, along with methanol, MTBE, glycols and some base oils, the latter chiefly from Taiwan and Malaysia.
Asian Export business is dominated by the large amounts of palm oil and biodiesel being shipped to Europe and the Indian Ocean. So far, volumes and rates remain stable. Some aromatics have been making their way from Korea to the United States at very competitive numbers in the $40s and $50s/t. Such levels are not necessarily obtainable for base oils, however, although some traders seem willing to explore the possibility to ship base oils to the United States.
India and Europe also have been targeted by Asian base oil sellers, with some success too. 5,000 ton base oils were fixed for Taiwan to Antwerp-Rotterdam-Amsterdam at $90/t, for instance.
It has been a very quiet week in the Middle East Gulf-India region. Westbound business is flat and several ships have open space. Rates for 4,000 to 5,000 ton parcels of base oils from India to the Mediterranean, for example, would be in the $75-80/t region.
Eastbound is also slow and some lower freights have been reported recently.
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.