It is always difficult to assess the U.S. market while the American Fuel & Petrochemical Manufacturers meeting takes place in San Antonio, simply because so many people attend the event and business comes to a halt. All the same, the impression is that the U.S. market has weakened further.

U.S. Gulf to Far East, for example, fell a further $5 per metric ton, which makes a total reduction in rates of around 30 percent since the start of the year.

Parcels of 5,000 tons from Houston to Mainport Far East can be picked up for as little as mid-$60s/t. And there is still open space on the route.

U.S. Gulf to India-Middle East Gulf is another route that has registered a decrease in freight values this past week. The reductions have been more moderate – around $2/t, but it is because there are several ships that are scheduled to head out but still require those last few cargoes to be really full.

Transatlantic eastbound came off slightly, with news that 5,000 ton lots of styrene were being concluded in the upper $40s/t. These levels have become the norm. Contractual volumes are satisfactory enough that rates may now stabilize around these levels.

U.S. Gulf to East Coast of South America is slower, and several ships are competing for cargoes. As such, rates for a typical 5,000 ton cargo of easy chemicals from Houston to Santos would be in the very low $70s/t, which signifies a small decrease since last week.

This leaves the U.S. Gulf to Caribbean as the only route that has been busy and in which prompt space is difficult to find.

Europe

The final days of March were satisfactory for ship owners with vessels running in the North Sea and Baltic trades, but looking forward into April it is not quite as rosy. There is a possibility that demand will build over the next couple of days, but as it stands right now there is more open space in the region than we have seen for some time.

Southbound into the Mediterranean is a similar story. Prompt demand is more than ample, but not too much is showing beyond the second week of April. Again, demand may surge, but owners are a little more nervous about how things are shaping up in the run-up to Easter. Base oils have not been prominent, and the few such cargoes seen have mostly been in-house requirements, which backs up reports that base oil supplies are currently scarce.

Northbound from the Mediterranean is steady, and rates are holding, although a couple of ships appear to have come out of their usual contractual pattern, which might be indicative of a slowdown occurring.

Inter-Mediterranean routes are busy and there is not much sign of things taking a breather. The clamor for prompt space is continuous and rates continue to be firm.

Transatlantic westbound is stable and space is well matched by demand. That said, there have been a few early April ships that contested for prompt business, which resulted in a slight drop in freight levels. Looking forward into April, there have been a number of ethanol, acid, paraxylene and MTBE requirements which should see the situation stabilize again.

Space on the Europe to Far East service is restricted to just a couple of ships and so far the levels being talked about remain very strong – 5,000 ton parcels from Rotterdam to MPFE weigh in at around $110/t. However, there is not a great deal of demand either, which could result in rates coming off later in the month. A couple of parcels of base oils have been attempted to the Far East, and a couple more have been quoted into India-Middle East Gulf. On the latter route, there certainly seems to be a bit more space from the Black Sea and rates of mid-high $60s/t might just be workable.

Asia

Prompt space has become just a little tighter on the domestic Asia market. Demand has not been hugely exciting, however. A number of aromatics have been seen heading into China and Taiwan, but downstream demand in China for some products – such as textiles and plastics — is poor, which is ultimately expected to impact shipping demand over the next month or so.

Palm oil demand has been very poor from India and China, where buyers have been opting for cheaper soybean and sunflower oils, or even for the seeds themselves for local crushing.

Asia export demand, however, has been robust. Benzene and methanol demand is perhaps slowing down, but there have been a variety of other products quoted, whether biodiesel or cumene or solvents, and rates are fairly robust. Parcels of 2,000 tons from Korea to Turkey, for example, attract levels in the $160-170/t region. Some base oils have been heard moving from Korea to the U.S. Gulf, and are thought to have gone in the upper $80s or low $90s/t.

The Middle East Gulf-India region is seeing a little more action, and with fewer palm oil carriers arriving in the region, space is starting to thin out. All the same, there is a hefty program of plant maintenance in the region through April, which might dull demand.

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 Panos Giannoulis can be reached at fix@ssychems.com or +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.