Apart from routes to the Far East, trade lanes out of the U.S. Gulf have been flat. Europe faltered this week, while Asia continues to see growth in certain sectors.
U.S. Gulf of Mexico
Those owners who judged it prudent to hold onto their last remaining open tanks on the U.S. Gulf-to-Far East service have been vindicated and are able to cash in on the shortage of space for August loading.
Rates are accelerating upwards as charterers vie for the last bits of space. Owners are asking for numbers as high as $80/ton for 5,000 ton parcels from the Gulf to principal Far East ports and China, and there is a modicum of demand, chiefly aromatics along with some speciality chemicals business. However, there are a lot of idle ships in the U.S. Gulf that could be attracted on berth if anyone can pull together 10,000 to 15,000 ton base cargoes. It is therefore a temporary situation and unlikely to last into September.
U.S. Gulf-to-Caribbean is very dull right now, and even trade to the east coast of South America looks somewhat plain. There are a few base oil possibilities into the Caribbean and into Brazil, as well as some ethanol for Brazil.
Transatlantic eastbound sees a bit of ethanol traffic too, but there are not many other highlights. Space is ample, and rates are hanging around $50/t for 5,000 ton parcels from Houston to Rotterdam. It has been suggested that falling natural gas prices could assist U.S. producers in becoming more competitive on the global market, but that assumes they have surpluses of the grades that are in demand.
Europe
Worries over the global economy caused a great deal of business to fizzle out last week. Many deals failed to materialise as the gulf between buyers and sellers widened, and a lot of cargoes never lifted subjects. Even the impervious European coastal routes lost momentum, and one or two prompt ships are beginning to pop up in the Eastern Mediterranean and in Northwest Europe.
Western Mediterranean space is still very scarce, however, and rates are firm. In a few instances, owners are trying to obtain freights that are 50 percent to 100 percent higher than previously fixed on certain intra-Med cargoes, but most charterers are unable to adjust their freight ideas so quickly. Base oil volumes have been a bit subdued across the region, with most shipments being either in-house or occasional parcels into Turkey and Egypt.
Transatlantic westbound is seriously slow, and rates remain low as a result. Rates in the high $30s/t have been done again on parcels of around 4,000 to 5,000 tons from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic coast.
Apart from a couple of base oil fixtures to China and Singapore, Europe-to-Far East has been very quiet. There is not much August space remaining, but demand is not exactly booming either. Rates are in the mid $70s/t for 5,000 ton parcels from Rotterdam to main Far East ports and in the low $80s/t for 2,000 ton pieces from Rotterdam to the west coast of India.
Asia
Domestic Asian markets are fairly active, and tonnage supply is a bit tighter. Intra-Far East sees more paraxylene quotations, as well as benzene/toluene/xylene and small parcels trades such as phenol, MEK, solvent naphtha C9 and butyl acrylate. Moreover, a large number of ships have been engaged in the palm oil business into the Indian Ocean, further depleting the domestic market of available space. Rates from Singapore to Korea have broken into the low $40s/t territory for 5,000 ton cargoes, for example.
Export business too has been affected by the exodus of tonnage, and rates are strong for destinations such as the Mediterranean and Northwest Europe. Freight levels are well into the $90s/t for 5,000 ton cargoes from Korea to Antwerp-Rotterdam-Amsterdam, although rates into the U.S. Gulf remain in the $50s and $60s/t for large cargoes. Palm oils from Southeast Asia into the U.S. Gulf can fetch numbers in the $80s/t, but most of the ships heading back to the U.S. Gulf tend to make Korea or Taiwan the last stop before sailing.
A touch more business has been seen both east and westbound from India and the Middle East Gulf, and rates appear to have stabilised.
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.