It turns out that the expected rush never occurred on the U.S. Gulf-to-Europe route. It probably would have done had styrene continued to flow, but the arb suddenly closed and that left relatively few cargoes around to be fixed, such as glycol, vinyl acetate monomer, ethylene dichloride, caustic and ethanol.

Space is in fact quite tight through the first half of November and rates should not really be going down presently. The styrene arb is also very fickle and could suddenly switch on again, especially as we get closer to year-end and the usual surge in demand.

U.S. Gulf to Far East has continued to pick up steam, with just very limited amounts of space left for October and the first half of November. Ethanol has been one of the hot grades, with one owner fixing 20,000 cubic meters alone to the Philippines. A cargo of 15,000 tons of paraxylene from the U.S. Gulf to China was just too big for the existing ships on berth and ended up paying mid $70s/t in order to convince an owner to commit a ship to this route.

Styrene has been busy on the route, and owners seem happy to accept low-mid $60s/t for now for 10,000-ton parcels. If this pace continues, then owners will soon start to ask for higher numbers. Base oils have not really been present on this route.

U.S. Gulf to India-Middle East Gulf, base oils have been noted on the route into India, with mention that 7,000 tons may have been booked. Ethylene dichloride is also reported to be popular these days with a rash of new sales concluded. Lastly, there is still some interest in moving ethanol and vegetable oil into India and the Middle East Gulf, which will probably mean that space will disappear fairly quickly.

U.S. Gulf to east coast South America, there has been talk that rates are falling on this route, yet there has been hardly any spot business concluded upon which to base this assumption. Space is also fairly tight until the first week of November, in which case it would be safer to work off mid $60s/t for 5,000-ton parcels from the U.S. Gulf to Santos and then, should there be some prompt space around later in November to target a rate in the low $60s/t. Some base oils have been fixed into Brazil from Houston.

U.S. Gulf to Caribbean, there is little available space through the first few weeks of November, which will keep pressure on rates for now. There is still quite a backlog of vegetable oil to be shifted as well, and vegetable oil charterers are already coming out with their December and January requirements in the hope of securing space before it is too late. It might be a while therefore before we see any palpable rate reductions in this trading area.

Europe

Most owners have been left wishing for a bit more business in the North Sea and Baltic this week because a substantial number of them run the risk of having prompt tonnage soon unless trade picks up again. Base oils have been noted out of the Baltic, but not to any great extent, while those base oil cargoes on the continent are mostly for term supply.

The volume of business southbound has been reasonably good all week, with some of the prompt requirements finding it tough to locate potential carriers.

The end of the month, however, sees a new wave of ships coming up from the Mediterranean and this should be sufficient to keep freights from moving up. Some base oils are enquiring to ship into the Mediterranean but they are mostly routine shipments and are not spot sales. Other products being moved include ethylene dichloride, styrene, paraxylene, fatty acid methyl ester, caustic, methanol, ETBE and MTBE.

Northbound, there has been a steady stream of chemical cargoes quoted to northwest Europe, which has meant that some cargoes have not been fixed at the levels which the charters had in mind. Equally, rates have not increased to the levels that some owners have been asking. For example, 6,500 tons of base oils from Italy to Rotterdam fixed at just under $40/t, which is at a lower level than that achieved by a similar cargo of toluene.

Inter-Mediterranean, the tonnage situation in the Mediterranean is much tighter than last week, and owners have found they can bump up the rates for prompt cargoes in several key areas.

West Mediterranean in particular is becoming very tight, and the refinery situation in Morocco will probably prolong the tightness since the country will have to import lots of small oil parcels using small chemical and oil tankers that are able to access the small and restricted ports in Morocco. Base oils have been pretty active in the East Mediterranean and Black Sea too.

Whilst it would be an exaggeration to call the westbound transatlantic market busy, it has not been flat either. Paraxylene has been active, with cargoes quoted out of Kotka, Rotterdam, Gonfreville and the Mediterranean. Benzene and pyrolysis gasoline has also been in the limelight, although making these deals work has been rather strenuous.

Rates for 5,000-ton parcels from Rotterdam to the United States Atlantic Coast have been in the mid $40s/t. Meanwhile, 10,000 tons of pyrolysis gasoline was booked from the Mediterranean at over $100/t but only because the cargo needed a long, long time for loading. Caustic, sulphuric acid and urea ammonia nitrate have been noted, while some base oils have also been aired.

Europe-to-Far East, compared to recent weeks, the route into Asia has been positively scintillating. Styrene has been the product in demand with cargoes being worked to China from Rotterdam in the low-mid $80s/t. Paraxylene and orthoxylene too have been mentioned, and there was an enquiry for 5,000 tons of base oils to Singapore from Italy.

Among Europe to India-Middle East Gulf routes, all of a sudden, space into India and the Middle East Gulf began to disappear as a multitude of small parcels came onto the market at once, allowing owners who still had some space left to ask substantially more than just a week ago.

Parcels such as isopropanol, hexane, cyclohexanone, solvent naphtha C9, solvent naphtha and styrene were among the products looking for space, the rates for which jumped from $90/t to $110/t and even $120/t in some cases. Small lots of base oils were also noted looking to ship into the Middle East Gulf, while bigger lots of phosphoric acid and vegetable oil have been concluded too.

Asia

Among domestic Asia markets, several of the main routes within Asia are reported to be tight with little if any October space remaining. Northbound from Southeast Asia is such a route, and there have been several base oil requirements trying to track down ships able to make October loading. Cargoes of pyrolysis gasoline, mixed aromatics, MTBE and benzene have been detected this week.

Southbound too is reported to be tighter for prompt loading. The intra-Northeast Asia market has seen a moderate amount of new business, including base oils from Korea, while in Southeast Asia owners feel the market has gained more momentum this week.

Rates have remained pretty much unchanged for the moment throughout Asia, and it will take at least another week of enhanced activity before owners could feel confident to ask for a dollar or so more.

Among Asia export routes, transpacific has not been particularly busy for prompt loading, apart from some paraxylene, cumene and fatty acid methyl ester requirements. Benzene business has been more cautious with traders looking at ships that can provide either January or February delivery in the U.S. Rates are stable to weak for cargoes to the U.S. Gulf.

The market to Europe is fairly busy, however, and the main carriers have almost all filled out on contractual business. That leaves just a few smaller ships willing to parcel up and rates have for the most part been firm, with levels back into the $135-$180/t territory for 1,000-2,000 ton lots. The only base oils being seen in this environment are inter-company movements.

The market into India and the Middle East Gulf is pretty lively too, and owners are asking rates in the $60s and $70s/t for 2,000-ton parcels, depending upon load and discharge ports.

The Middle East Gulf-India region has been fairly busy again with quite a few cargoes of MTBE, pyrolysis gasoline, ethylene dichloride, methanol, styrene, paraxylene, benzene, glycols and base oils.

Eastbound, several large chemical cargoes came out this week from the Middle East Gulf, and in addition there have been quite a few 10,000-ton parcels of aromatics from India and the Red Sea too. There is not so much part-cargo space left, although there are plenty of ships that are fully open within the next fortnight. Rates remain soft.

Westbound, there is less prompt space around to Europe while there has been a reasonable number of new enquiries, ranging from small parcels to some larger lots of aromatics. Rates are a touch firmer.

Adrian Brown is a 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 12 0750 7507. In the London office SSYs Ian Roberts can be reached at fix@ssychems.com or +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.