Americas
In spite of being exceptionally tight on open space for any direction out of the U.S. Gulf in December, rates have mostly stabilised. The reason is that charterers have, out of necessity, moved things forward to January which open up more tonnage possibilities.

U.S. Gulf-to-Far East for example continues to see massive requirements for glycols, styrene and aromatics, but the last few small ships require levels over $120/t which is deemed too costly, and so the shipment dates are being shifted back into January. The outlook is that rates are likely to remain in effect for another month since demand exceeds supply of vessel space, but going forward, it is questionable how much material Asia can continue to absorb.

Transatlantic eastbound may have registered a slight uptick in rates, purely because of the general tightness in the U.S. Gulf, as well as continued demand for ethanol. Owners claim $60/t as the going level for 5,000 tons of easy chemicals from Houston to Rotterdam, though it may be possible to shave that figure, given the right ship on the right laycan.

U.S. Gulf-to-Caribbean and Gulf-to-east coast of South America are accepted as routes that have limited space opportunities, but we do not believe this has impacted further on existing freight levels. An interesting enquiry is that for up to 10,000 tons of base oils from Richmond, Calif., to Brazil.

Europe
So far, there has been no year-end rush for space, as is customary in the North Sea and Baltic at this time of year. There is instead an orderly pace of fixing. Space is neither tight nor long and freights are stable.

Southbound into the Mediterranean is strong. A number of large requirements for methanol, MTBE, caustic and FAME have been worked and soon deplete the amount of open tonnage, and rates are on a firm trend. Base oils continue to be fixed into Turkey, and there are other Mediterranean destinations that are currently under discussion. Northbound is sluggish and apart from higher vegetable oil rates from the Black Sea, rates are largely unchanged.

Inter-Mediterranean demand remains deceptive. The market gives the impression of being sedate, but many ships are booked ahead by at least a week. The test will come over the long Christmas period and whether demand will be sustained. A few owners sense this may be a good time to send their ships away on longer trips. Whether this will be sufficient to buoy the Mediterranean market for those owners remaining behind over the holiday season remains to be seen.

Transatlantic westbound is not busy, but tonnage is generally tight through to year-end. Demand includes caustic, sulphuric acid, base oils, UAN and biodiesel. Rates for 5,000 ton parcels from Rotterdam to Houston are in the region of mid $40s/t.

Europe-to-Asia is a similar picture to that of U.S. Gulf-to-Far east, except that a couple of ships still hold December space. Rates are therefore hovering in the upper $90s/t for 5,000 ton parcels of easy chemicals from Rotterdam to China, but cargoes that require more sophisticated carriage, or heat, such as base oils, will take that figure well into triple digits.

Europe-to-India and the Middle East Gulf has been active and freights have increased. Base oil demand has contributed to this, with several cargoes in the 6,000 to 10,000 ton size booked from the Mediterranean and Black Sea for numbers over $100/t.

Asia
Domestic Asian markets have received an injection of new business that will probably tide most of the coastal fleet over until January. Rates are up slightly too, particularly on the busy routes such as Korea or Japan to China. 3,000 ton parcels from Korea to China now fetch low $30s/t instead of high $20s/t. Larger ships however are facing more difficulty in securing sufficient cargo, particularly on routes such as north and southbound.

Export business is also just starting to be impacted by the potential oversupply of tonnage in the region in January and February. Palm oil traders for instance are now beginning to hold back their enquiries, anticipating lower levels. Currently, numbers for 15,000 ton cargoes from the Malacca Straits to the eastern Mediterranean are well into the $80s/t, but these levels may ease after Christmas.

India-Middle East Gulf markets are inundated with ships. Westbound for example sees more ships on berth with space than we have seen for a long time. Freights are falling as a result. Even small parcels of 1,000 to 2,000 tons from the west coast of India to the Med have dropped by some $5 to $10/t to mid-high $120s/t. 5,000 ton parcels from the west coast of India to the Med should see low $80s/t. Eastbound numbers have not changed substantially but latching on to one of the ships already on berth and with space could yield a bargain.