All the major markets have continued to experience even lower levels of activity this week. A significant number of ships are now idle, and some have not moved for three weeks. The only positive note for owners is that bunker prices are now much lower – typically $580 per ton FOB Rotterdam instead of the $700/t that it cost two months ago.
U.S. Gulf of Mexico
It has been another difficult week for owners with ships that are open in the U.S. Gulf. Not much is happening in the U.S. Gulf to Caribbean trade, even in the vegetable oil and clean petroleum sectors. A tender into Colombia may see a requirement for a small cargo of base oil fixed from the U.S. Gulf, but is a far cry from the first three months of the year which was very active.
The U.S. Gulf to East Coast of South America is one of the more stable routes. June space is tight, at least until the very end of the month. A number of cargoes require prompt space, which may prove tricky as the volumes are not quite large enough to justify slotting an extra ship on berth. There are several base oil possibilities, too, but as they fall into July, there should not be the same issue with finding space as there is this month.
Transatlantic eastbound traffic is a bit ragged. A number of prompt ships still require last-minute cargoes before filling. Styrene, biodiesel and ethanol are probably the main commodities quoted, but volumes are not strong enough to stop rates from sliding to around $50/t for 5,000 ton parcels for Houston to Rotterdam.
The U.S. Gulf to the Far East is very quiet in terms of spot demand. The majority of June ships have managed to just about fill, but it has been a struggle. There are only a handful of spot market orders out there, which means that freights remain in the low $60s/t for 5,000 ton parcels Houston to scheduled principal ports in the Far East.
In contrast, the U.S. Gulf to India trade is actually quite firm. Scheduled vessels are full for June, and even the July ships are getting close to full, should all the cargoes fixed on subjects get the green light. Rates are close to $90/t for typical 5,000 ton parcels from Houston to Mumbai. Fortunately for these owners, there is not quite sufficient additional volume for any of the spare ships that are fully open in the U.S. Gulf to even consider coming on berth.
Europe
The coastal market within Europe has been badly affected by the slowdown in trade which has left ships sitting at anchor for days and sometimes weeks on end. Even contractual volumes are sluggish in the North and Baltic seas region, which means that freights have lost $1 to 2/t over the past fortnight.
Southbound into the Mediterranean is reasonably robust, but nonetheless there are still gaps and the occasional spare tank that owners would like to fill. Northbound is surprisingly firm and we have seen some strong numbers quoted on this trade lane.
The intra-Mediterranean route, however, is dull. Even the clean petroleum and vegetable oil sectors are lean.
Transatlantic westbound is relatively calm, with 10,000 ton pyrolysis gasoline from Terneuzen to the U.S. Gulf in the high $30s. Several further pyrolysis gasoline cargoes were booked, including one of 5,000 ton parcels from Ploce that went in the low $80s/t. Caustic has been talked, and there have been some smaller parcels of clean petroleum and urea ammonia nitrate, but demand is not strong enough to cause freights to firm.
Base oil activity is pretty subdued to the United States, with just some business targeted to the East Coast of South America, the Caribbean and West Africa.
Europe to the Far East has been very quiet with lots of part-cargo space available for June. Rates are notionally unchanged at around $80/t for 5,000 ton parcels for Rotterdam to principal ports in the Far East.
Europe and India to the Middle East Gulf is quiet, too, even though phosphoric acid shipments to India are now in full flow. Little if any base oil demand has surfaced in this direction this week.
Asia
Apart from a string of aromatics cargoes from Thailand to China, and the occasional shipment of methanol and MTBE in the same direction, there has not been a great deal of excitement in the Domestic Asian markets.
With the exception of regular volumes to India, base oil activity has been slow in the region.
Export business is considered to be reasonable and there is sufficient spot demand to tolerate a couple of non-contractual ships this month. Most parcels are however small in nature, typically 1,000 to 3,000 tons in size, paying usually around $120-130/t to Europe. Some small cargoes of base oil have been interspersed among the parcels of solvents.
Palm oil rates have lifted to Europe, partly because of steady demand, but also because there are fewer ships being fixed into Asia. The Middle East Gulf to India region has been calm, but rates are mostly unchanged both east and westbound. Typical levels into the Med are between $75 to 85/t for 5,000 ton lots from the Middle East Gulf to Mediterranean. .
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.