Nothing exceptional has occurred out of the U.S. over the past week.

Hopes of a U.S. Gulf-to-Far East revival have been smothered by Asian buyers retreating before the holiday break. Some base oils continue to be attempted into China and Singapore but products such as styrene and some of the aromatics have been priced out of range.

U.S. Gulf-to-India-Middle East Gulf is more used to seeing base oil traffic, and in that respect, the route does not disappoint. Several cargoes have been worked and a couple more are jostling for position. Rates perhaps reflect the variety of ships that are heading out in this direction over the next couple of weeks, courtesy of the big lots of ethanol, ethylene dichloride and vegetable oil, with figures in the low $70s per metric ton being reported for the big cargoes and $90-$100/t for the smaller parcels.

Transatlantic eastbound is once again all about styrene with initial demand from the Mississippi River and then traders switching to Houston loading. Rates are very much around $50/t for 5,000-ton parcels. Base oils are not part of the mix this week.

Base oils are being seen on the U.S. Gulf-to-the east coast of South America route, along with acetone, ethanol and caustic. Owners are finding contractual demand to be strong, and with demand for ships being sluggish back out again afterwards, there is no incentive for owners to schedule additional ships on this route. It is possible that the carnival season and the long holiday weekend in the U.S. contributed to the apathy.

U.S. Gulf-to-Caribbean clammed up this week, even on base oils, although rates on the fixtures that have been done show no real change either way.

Europe

It has been an unremarkable week in the life of the North Sea and Baltic, with a mixture of prompt open positions and a number of prompt cargoes that get quoted over and over again. In such a well-matched market, rates tend to be steady with no adjustment either way.

Some of the base oil cargoes from the Baltic have been hard to find ships for and one solution has been to amalgamate a couple of separate deliveries into a single shipment, although not all the customers can be serviced in this manner due to restrictions at the receiving berth.

Southbound into the Mediterranean was rather dull this week. Some base oils were noted, although chiefly to term customers with some spot interest into the east Mediterranean.

Of rather more interest, northbound traffic has been an attempt to ship base oils from Spain to the United Kingdom. Otherwise, trade on this lane has been steady but not terribly interesting. Freight levels are just about the same as before, with the chance to get a dollar or so less for the right position.

Inter-Mediterranean business gives the impression of being dull, but it is surprising how many cargoes do not get fixed at the first attempt but linger around, which suggests that owners are rather more bullish than charterers had expected.

Transatlantic westbound has been quite active again, with cargoes of paraxylene, benzene, toluene, mixed xylenes, pyrolysis gasoline, caustic, urea ammonia nitrate, sulphuric acid and MTBE being worked.

Some base oils continue to ship across to Mexico and Houston, particularly bright stock, with further base oil cargoes heading to West Africa. Rates have surprisingly not firmed, and if anything, have slipped a little. It is not that there is a massive amount of space available either, but scheduled owners sense competition from outsiders and that is prohibiting them from asking over $50/t for 5,000-ton parcels from Rotterdam to the U.S. Gulf.

Europe-to-Far East is similar in that respect. Scheduled space is tight and down to the last few tanks, but owners wish to fix in the low $90s/t instead on the mid $90s/t of last week, again because of the perceived threat of outsiders. With the Chinese New Year imminent, it is likely that little will happen this week, but there is interest from traders to place base oils into Singapore, China and Vietnam so it may be more productive next week.

Europe-to-India-Middle East Gulf is very active, with a lot of base oils being seen. Rates are starting to go up, just because many of the parcels are looking for Mediterranean space rather than loading from Antwerp-Rotterdam-Amsterdam. Plenty of small chemicals parcels are around too in this direction, as well as plenty of vegetable oil and phosphoric acid.

Asia

It has understandably been a quieter week on the domestic Asia scene, especially in relation to China due to the proximity of the lunar holidays. All the same, there has been a constant stream of requirements, and some of them for loading over the holiday period.

Base oils have again been one of the most active products with a lot of material quoted out of Korea, as well as some from Japan, Thailand and Indonesia. Rates are cited as weak for much of this, and the reason seems to be that there are glaring holes in many of the owners fleet programs.

The chemicals market is somewhat flaky these days, with depressed commodity prices and numerous plant turnarounds taking place within Asia.

The palm oil market is struggling as well, and there are plenty of ships available that otherwise might be engaged in palm oil activity. Some of the larger ships over 10,000 dwt have had to turn their hand to the clean petroleum market in Northeast Asia in order to get through this awkward period.

Asia export trades are not terribly busy either, and rates have begun to falter on the Asia-to-Europe and the Asia-to-India routes due to reduced demand and an oversupply of tonnage. Parcels in the amount of 5,000 tons going from Korea to Rotterdam are running at close to $105-107/t, while the same parcel to Mumbai could possibly go in the low $50s/t. Rates to the U.S., however, are pretty much unchanged.

The slack palm oil market has a lot to do with this situation, and of course minimal demand is coming through from China. March is expected to see some sort of seasonal recovery, although the market will have to wait until after a massive palm oil industry gathering in Kuala Lumpur first.

The Middle East Gulf-India region is still fairly active, although owners lack of confidence means that rates have continued to track downward on both westbound and eastbound services.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found atwww.ssyonline.com. Adrian Brown, in the U.K., can be reached atfix@ssychems.comor by phone at +44 1207-507507. In the London office SSYs Panos Giannoulis can be reached atfix@ssychems.comor +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.