Owners everywhere were glad to see the back of August since it was such a quiet month. September has started cautiously, but there are one or two areas where activity levels have shown a slight improvement.
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Traders along the Far East route have started to look at sending styrene to Asia again, but few deals have materialized so far. Owners are looking for levels in the low $50s per metric ton for 5,000-ton parcels to Korea or Taiwan for instance. The rush of paraxylene has moderated, and so too has the trade in ethanol. Some methanol is being quoted to Japan from the Caribbean, and some ethylene dichloride has been booked. A rather peculiar requirement for 5,000 tons of pyrolysis gasoline from Houston to Korea was seen, as the U.S. usually imports pyrolysis gasoline.
The past couple of weeks has thrown up a considerable volume of material to be moved back to Europe along the transpacific route. Rates, however, have stayed resolutely flat, and, in some cases, have even slipped, chiefly because of a glut in vessels in the U.S. Gulf. Caustic is the latest product to show on the route. Ethanol has been fixed, but styrene has drawn to a close with the restart of a major styrene plant. Glycols, cyclohexane, vinyl acetate monomer and cumene cargoes have all been seen this week. Base oils are moving from time to time, but mostly in smaller lots. Four thousand tons Canadian base oils were reputedly fixed this week from the Mississippi to Dordrecht, Netherlands.
Contractual business into the Caribbean seems to be healthy, with some of the established owners reporting a lack of September space which they can play around with on the spot market. There are, however, sufficient vessels of all types, from simple coated ships to highly sophisticated stainless steel vessels, available to cover most prompt requirements and at competitive levels.
Several base oil cargoes have been moving into Brazil over the past week or so, ranging from small 2,000-ton parcels to large cargoes comprised of multiple parcels, the largest of which was 12,000 tons which went in the $60s/t for loading at the end of September. Demand into the east coast of South America has otherwise been lacklustre, with the occasional shipment of caustic, styrene and ethanol having been done.
Base oil activity into India and the Middle East Gulf has subsided, and instead there have been some shipments of ethanol, methanol and styrene. Rates have come under pressure, with 10,000-ton cargoes seeing levels in the very low $60s/t to the west coast of India.
A resurgence in biodiesel demand has come to the aid of ship owners who might otherwise be looking at idle time on their vessels since demand along the North Sea and Baltic route for both chemicals and clean petroleum has dropped away this week. In terms of base oil, a couple of spot market deals have taken place out of the Baltic, and there have been several semi-contractual deliveries into the United Kingdom from Continental Europe. Rates are considered to be on the soft side at the moment.
Southbound demand for chemicals and base oil remains depressed from Turkish buyers, with some importers saying that they can barely sell 50 percent of their contractual volumes. Elsewhere, 8,000 tons of base oils were booked into Vado Ligure, Italy, with the next shipment of 7,700 tons being lined up for shipment just two weeks afterwards. Biodiesel is a major component on the southbound route, but there have also been fixtures of ethanol, caustic, methyl tertiarybutyl ether and paraffins this week.
Aromatics have been the main driver on the northbound route, with cargoes noted from Romania, Israel, Turkey, Italy, Croatia, France, Algeria, Spain and Portugal. Rates are average right now – 6,500 tons of aromatics from Venice and Priolo, Italy, to Antwerp-Rotterdam-Amsterdam went for 268,000, for example, while 5,000 tons of ETBE from Fos, France, to Donges, France, fetched $165,000, both regular rates for these movements.
Fresh base oil enquiry is slim along the Mediterranean route at the moment, but over the past couple of weeks there have been quite a few movements within the Mediterranean and North Africa. Weaker base oil prices may now however be causing customers to reconsider further replenishment. Tankers have been enjoying a good spell of fixing biodiesel within the Mediterranean, but due to plentiful competition from other owners, rates have been at fairly lowly levels.
Every owner with a ship on the westbound transatlantic route is of the opinion that the market is slow right now, and since there are a several ships that still have part-cargo space to fill, this view gains a lot of support. What is then surprising are the freight ideas that are quoted, with 5,000-ton parcels from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast seeing initial ideas above $40/t. Five thousand tons of paraxylene was reportedly fixed at $39/t, which is a significant increase over the previous shipment. At the other end of the scale, 7,000 tons of pyrolysis gasoline from Rotterdam to the U.S. Gulf is said to have gone for around $30/t. On the base oil front, the only fixture seems to be one of 10,000 tons that was booked to Cuba from Livorno, Italy.
Demand has been steady on the Far East route, with enough there to allow a couple of outsiders on berth, one parcelling up with multi-grade chemicals. Another took 12,000 tons of base oil from Kavkaz, Russia, to Singapore, and a third booked a similar cargo of base oils from Kaliningrad, Russia. Styrene is also getting fixed again to Asia from Europe, and there was a usual cargo of rubber process oil from Hamburg that was quoted.
Rates to India and the Middle East Gulf remain soft with too many vessels chasing too few cargoes. Ten thousand tons of mixed xylenes did succeed in getting fixed to Sikka, India, though, and another cargo of aromatics was covered from Haifa, Israel.
The region continues to be battered by typhoons, with Typhoon Mangkhut scheduled to hit Northeast Asia this week, the 22nd typhoon this season, and Typhoon Barijat developing in intensity right now and likely to hit south China. Most ports are working normally in the meantime, but there will inevitably be some disruption and delays, tightening tonnage in the area. It is already difficult to find prompt space along the domestic route, keeping freights for replacement tonnage at firm levels. Base oil is one of the busier commodities, but what is noticeable is that so many of the requirements are miniscule, with some barely registering 1,000 tons, suggesting buyers are taking product little but often.
There is no benzene activity on the transpacific west export route, and several ships are scouting around for cargoes to fill out their balance space. A colossal shipment of 36,900 tons of base oils was apparently fixed from Singapore to Rotterdam, Houston and Baton Rouge, U.S., for a level said to be in the region of $53-$55/t. The market to Europe is described as quieter, but, that said, the rates on some of the biodiesel cargoes are in the $90s/t for 10,000-ton quantities. The September lifting of 7,800 tons of base oil from Malacca, Malaysia, to Antwerp was reported to be high $70s/t, which is similar to the slightly smaller August shipment.
There has been more activity reported in the regional markets along the India and Middle East Gulf route. Aromatics have been busier, while base oils have been especially busy, with multiple shipments from Yanbu, Saudi Arabia, Jeddah, Al Ruwais, U.A.E., Sitra, Bahrain, Karachi, Pakistan, and Iran. A couple of phosphoric acid enquiries from Aqaba, Jordon, to Al Jubail, Saudi Arabia, were interesting, otherwise demand is composed of much the same kinds of products as usual. Eastbound is busier for contract holders, while spot demand sees many cargoes of MTBE, methanol, styrene, caustic, paraxylene, benzene and ethanol quoted. Several ships still have space for this month, keeping rates unchanged for now. Westbound is stable. Traders are looking at possible cargoes of caustic, while 8,000 tons of ethylene dichloride were seemingly fixed to Egypt. Methanol, paraxylene and benzene are also under consideration.
Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached email@example.com +44 12 0750 7507. Information about SSY can be found atwww.ssyonline.com. In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.