The market in the U.S. Gulf of Mexico has turned sloppy, causing some freights to droop. European coastal business is active, but deep-sea activity is thin. Asia has been a bit subdued over the past week.
U.S. Gulf Coast:
Generally speaking, the U.S. market has been quiet since Easter. Tonnage has begun to build up to some extent, although it has not reached the stage yet where it is causing freights to buckle. As with last week, there have been sufficient random movements that have absorbed most of the surplus space without those ships ever ending up on scheduled routes.
Transatlantic eastbound, for example, produced just enough ethanol and styrene cargoes to keep freights in the mid $50s per ton for 5,000 ton parcels from Houston to Rotterdam.
The U.S. Gulf to Caribbean is another route that just about managed to get through the week without freights being dampened. U.S. Gulf to Brazil routes, meanwhile, actually recorded higher freights over the past couple of days due to large contractual nominations that kept scheduled carriers from offering on-spot business. Owners are now talking of freights of around $80 per ton to ship 5,000 ton parcels from Houston to Santos, Brazil.
However, freight levels on the U.S. Gulf to Far East and India routes both decreased. In the case of Asia, levels came off by about $5.00 per ton to $70 per ton for 5,000 ton parcels from Houston to scheduled principal ports in the Far East. On the U.S. Gulf to Mumbai run 5,000 ton parcels of base oils would fetch in the low $90s per ton these days.
Europe:
It was a better week for ships trading in and around the North and Baltic seas, with fewer ships left sitting idle. Rates have edged back up again after losing a bit the previous week. The southbound leg into the Mediterranean has been very busy, too, with a wide range of products seen, including ETBE, biodiesel, base oils, caustic and aromatics. In the Antwerp-Roterdam-Amsterdam to south Spain routes, 5,000 ton parcels have been reaching levels around 160,000 again.
Northbound is steady, with pyrolysis gasoline perhaps the most active of all products.
The inter-Mediterranean markets had a reasonably busy week and not much prompt space remains open. Some traders say their base oil sales into Turkey have been thwarted by the Turkish authorities restricting import licences for base oil.
Transatlantic westbound traffic is soft, with plenty of ships willing to go on berth. Urea ammonia nitrate has been busy, and a couple of fresh sulphuric acid requirements have been noted. Unusually, biodiesels have featured this week, but base oils have been less busy.
The route between Europe and the Far East, has been extremely quiet with several ships in May showing open space. A couple of traders are attempting to place base oil cargoes into Asia, but aside from this there has been very little else.
Europe to India and Middle East Gulf routes rely heavily on vegetable oils to fill available space. Rates are still in the mid to high $60s per ton for 10,000 to 15,000 ton cargoes of vegetable oils from the Black Sea. Pyrolysis gasoline has been noted, too, but phosphoric acid is still running normally to India due to a breakdown on price negotiations between buyers and sellers.
Asia:
Golden Week has begun in Asia causing domestic markets to slow down, especially intra-Far East and southbound into Southeast Asia.
Northbound, however, produced a number of enquiries, many of which are still for late May or early June loading, which are well beyond the majority of open ships. MTBE and methanol have been among the most common products seen.
Inter-Southeast Asia has been active, but equally there have been a number of ships sent into the region with cargoes from India and the Middle East Gulf region. Consequently, the resulting overhang of tonnage in Southeast Asia has caused rates to slump as these vessels try to find a way out.
Asian Export demand is still relatively firm. There are lots of small parcels of solvents, such as white spirit, acetic acid, ethyl acetate and acetone. Ship owners will quote levels as high as $185 per ton for 1,000 ton parcels from China to Turkey for instance, although some 2,000 ton parcels are known to have fetched $145 per ton. There have been a number of base oil parcels to Turkey included among this lot, several of which have been booked.
Palm oils have been busier to Europe and rates have begun to climb again, thereby supporting higher freights for the chemicals and base oil parcels.
For a short while, it looked as though the Middle East Gulf and India region would begin to see lower freights due to the greater influx of palm oil ships, but instead there has been a revival in demand, especially eastbound that has stopped the decline in freights. A number of MTBE, methanol, aromatics, paraffins and base oils opportunities have appeared for May shipment.
Westbound has been fairly solid, too. The premium for loading in Iran continues to climb with one trader revealing that 95 per ton was the lowest possible freight level he could find for 5,000 tons of base oils from Iran to Turkey.
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.