There has been little change in the U.S. market this week, and in Asia business has yet to resume to normal operations after the holidays. European coastal markets are busy, but less so on long-haul routes.
U.S Gulf of Mexico
No definitive trend has emerged in the U.S. Gulf of Mexico. The only trade lane to undergo a freight revision has been U.S. Gulf to the east coast of South America where numbers dipped into the low $70s per metric ton for 5,000 ton parcels from Houston to Santos for the first half of February loading. This has occurred because most of the ethanol cargoes have been covered. However, timing is important as contractual volumes are expected to pick up later in the month and freights may rebound.
U.S. Gulf to Caribbean had a nondescript week. Cargoes have not been profuse, yet those receiving quotes have not been fixed quickly, or else charterers have sought to widen loading dates to encompass more tonnage. Transatlantic eastbound continues to live off a diet of ethanol and styrene and freights are unchanged since the start of the year. Demand from the U.S. Gulf to the Far East is rebuilding. A couple of ships have been worked for full cargoes consisting of 20 to 25,000 tons each of mixed grades of chemicals, typically styrene, aromatics, phenol and acetone.
Europe
There has been demand for ships able to load prompt cargoes in the North Sea and Baltic region and rates are fairly stiff. Ice is beginning to form in the eastern ports of the Gulf of Finland. While not an immediate threat to freight rates for base oils loading from ports such as Riga and Svetle, it does cause some owners to reconsider sending their ships to the Baltic.
There has been a considerable volume of cargo southbound into the Mediterranean, including chemicals, biodiesel and base oils, the latter mostly for Egypt and Turkey. Freight rates are stable to firm. A typical 3,000 to 4,000 ton parcel into the western Mediterranean could easily cost $39/t and low-mid $50s/t into the Central Mediterranean.
Northbound is buoyant too. Freight levels are more or less identical to those on the southbound route. A 3,000 to 4,000 ton cargo from southern Spain to Antwerp-Rotterdam-Amsterdam can cost around $39/t. Inter-Mediterranean trades are lively and there is not much prompt open space left. Westbound transatlantic is slow and there is open space on both scheduled and unscheduled carriers. Caustic, sulphuric acid and urea ammonia nitrate are the principle commodities, and there have been a number of base oil fixtures too, both into the U.S.Gulf as well as into the Caribbean.
Freight rates remain unchanged for now, but could start to slip unless there is an improvement in demand. Europe to the Far East is still waiting for a full return to work in Asia. There has not been a lot of fixing, but when cargoes such as aromatics, phenol or acetone are booked, they end up paying pretty much the same as in earlier weeks. Europe to India and the Middle East Gulf has been busy on the base oil front, chiefly from the Mediterranean and Black Sea. Vegetable oil and pyrolysis gasoline have also been moving. Moroccan phosphoric acid sellers have yet to come to terms with Indian buyers, but other phosphoric acid producers have agreed prices and shipments are resuming.
Asia
It was mostly a quiet week on domestic Asian business, with only resurgence in demand happening in the past few days. Aromatics such as toluene, mixed xylenes and paraxylene have begun to appear on the cargo lists heading into China. There has been some styrene too, but base oils have been a bit quiet locally. Export business continues to see biodiesel, sulphuric acid and some palm oil business conducted to Europe and the Americas.
Benzene prices may warrant a look from traders, checking to see if the arbitrage is open. Freight ideas for 6,000 ton cargoes from Korea to Rotterdam have been in the $90s/t, and there is a lot of open tonnage that could potentially go on berth in February.
Rates from Asia into India are governed by the palm oil market that currently pays low $30s/t for 10,000 to 15,000 ton cargoes from Malacca Straits to the West Coast of India. A 3,000 ton parcel of base oil from Korea to Mumbai would probably attract offers in the $65 to $70/t region. The Middle East Gulf to India region is fairly slow at the moment and there is sufficient open tonnage for most requirements, whether westbound to Europe or eastbound to Asia. Rates are soft especially westbound.
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.