Nothing much has changed in the U.S. over the past week. What has become apparent, however, is that there is very little open space remaining on any route out of the U.S. Gulf for January loading. So far, few charterers have attempted to test rates for February shipment, while owners remain bullish on their freight ideas for February. We will see what happens nearer the time if trade starts to dry up.

The U.S. Gulf to Asia route, for example, has seen fewer chemicals requirements this week, but since there is virtually no space left, the freight level is in effect notional. To entice an outsider on berth would probably cost in excess of $100 per metric ton for quantities of 10,000 tons, but with so few candidates around, even this is unlikely.

U.S. Gulf to west coast of India-Middle East Gulf has no space remaining on the scheduled carriers which is why levels of close to $100/t have been reported on the latest fixture of 10,000 – 11,000 tons of base oils from Lake Charles to the west coast of India. Transatlantic eastbound is mainly given over to contractual demand these days and when a small parcel of chemicals is booked on the spot market it tends to be at firm numbers. We have seen levels ranging from upper $40s to mid $50s for 5,000 ton lots, depending upon whether it is Houston as load port (which is the cheaper option), or whether it is an outport such as Lake Charles or Corpus Christi.

U.S. Gulf to east coast of South America has no January space remaining, but for February we estimate 5,000 ton parcels will fetch mid $70s/t to Santos.

U.S. Gulf to Caribbean is another route with only limited positions still available in January. Heavy delays are being reported on the services from U.S. Gulf to Mexico, which is causing tonnage to back up.

Europe

It has been a strange kind of a week in the North Sea and Baltic. Ostensibly, it has been quieter on the spot side of things, but contractual demand has been strong. Consequently, there has not been any great excess amount of tonnage available and owners have felt justified in maintaining a firm stance. Space is also scarce heading southbound into the Mediterranean with only the scheduled carriers able to muster much space. Rates are generally firm.

Northbound, however, has been a bit quieter, but with few larger cargoes quoted, owners are reluctant to rely on fixing a bunch of smaller parcels in case they are unable to fill up. Again, rates are stable.

Within the Mediterranean, space has begun to open up, although oddly, there are still a number of requirements that have struggled to find the right ship. What seems to be happening is that as the Russian rivers and canals have closed due to ice, and the ships that normally trade there have come onto the open market. Most are only suited to vegetable oil or clean petroleum cargoes, but because they are very competitive they are taking away cargoes that would normally be taken by the traditional Mediterranean fleet and those ships in turn are starting to hunt for cargoes in the chemicals and base oils arena. Rates will probably become more competitive as a result.

Transatlantic westbound saw a lot of benzene and pyrolysis gasoline possibilities and because space is scarce for January cargoes have continued to be fixed in the $40-45/t for 5,000-10,000 ton lots from Rotterdam to Houston, while $70/t has been reported on a shipment of 2,000 tons.

Europe to Far East has not seen that many new requirements, probably for the same reasons as the U.S. Gulf to Asia market. Rates are therefore somewhat notional, but can be pegged at around $105/t for 5,000 ton parcels to China.

Europe to India-Middle East Gulf is a route that is being heavily influenced by the amazing volumes of vegetable oil heading out from the Black Sea, the rates for which have jumped into the $70s/t with some owners asking even $80/t.

Asia

Business has already started to drop off over the past week on the domestic Asia market due to the onset of the Lunar Holidays in the region. Quite a few ships have still to find work during the New Year itself and there is a good chance that owners will not resist charterers freight ideas, so long as it means having employment for the ship.

Asia export business has been mixed, with the U.S. benefitting from a rise in benzene shipments, the rates for which have been in the low $60s/t for 5-6,000 ton lots, whereas to Europe things have been a bit patchy. The smaller parcels still command rates in the $130s/t for example into the Mediterranean, but there are not so many bigger lots whereas there are plenty of ships open in the region looking for cargoes to Europe.

Rates may be edging downwards slightly as a result. Asia to India-Middle East Gulf however has seen a spread of chemicals and base oils quoted, which is keeping freight levels unchanged. Palm oil movements have been subdued this week too. The Middle East Gulf-India region has been mostly flat with no real changes detected neither westbound nor eastbound. Only the regional trade has been active with plenty of shipments in-between India and the Middle East Gulf and back.

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.