Very little progress has been made in any of the regions over the past week. The Americas and Europe are still desperately slow, and Asia is only marginally better.
Falling commodity prices, a glut of available product and nervousness over a potential global recession have caused traders operating along the Far East route to reign in the number of freight enquiries this week. Methanol and ethanol are among the remaining products that are receiving attention, but commodities such as styrene and glycols are on hold. Freights are notionally unchanged, but there is very little that has been fixed by which to gauge the freight trend.
In addition to the underlying jitters regarding the transatlantic market, the other major obstacle to trade has been the low water level of the Rhine. Charterers are unable to replenish stocks, nor barge material to a sea port. It has already resulted in the cancellation of 7,000 tons of cyclohexane from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam because there was insufficient room in the European storage tanks to take it. Styrene, benzene and ethylbenzene possibilities have been temporizing this week, leaving things like biodiesel, caustic and ethanol to help fill the gaps.
It has been another unexciting week in the Caribbean. There is a new tender for base oils into Cartagena, Colombia, for mid-November delivery, comprising 1,300 tons to 1,500 tons of four grades of base oil. Three thousand tons of caustic and solvents were booked from Houston to Rio Haina, Dominican Republic, in the high $40s per metric ton.
Ethanol continues to provide the bulk of southbound requirements into the east coast of South America, with some methanol also heading down to Brazil. In addition to the 3,500 tons of base oil requirements from the U.S. Gulf to Brazil that was quoted last week, which attracted no offers at all, and there is a new order for 6,000 tons from the U.S. Gulf to Brazil for mid-November loading.
Traders into India have been investigating the possibility of sending 10,000 tons of mixed xylenes to Sikka, India, from Houston, although it does appear that efforts are being made to source the cargo from either Europe or Asia instead.
Some months will produce a surge in demand along the North Sea and Baltic route in the closing stages of the month, especially if the preceding weeks have been inactive, but October this year has not been one of them. The lack of water in the Rhine is causing a massive headache for the industry, with quite a few inland chemical producers declaring force majeure. Already some companies are making enquiries about using ships as floating storage in ports such as Rotterdam and Antwerp because there is no more room in the existing storage terminals. Base oils have been a bit slow this week as well, apart from routine shipments, and freights are under downwards pressure.
Southbound demand has been a little more diverse this week. In terms of base oil, the first delivery of base oil to the new hub in Valencia, Spain, took place from Rotterdam this week, with a further shipment of 14,000 tons fixed from Augusta, Sicily, the latter cargo reportedly paying around $220,000. An enquiry to ship 1,500 tons of base oil from Rotterdam to Greece was circulated. Several paraxylene possibilities have been noted into Portugal and Spain, and some caustic was seen to similar destinations. Fourth thousand seven hundred tons of ethanol fixed from Tees, England, to Fos, France, and 3,000 tons to 3,500 tons of alkylate was noted from Antwerp-Rotterdam-Amsterdam to Greece. Several cargoes of biodiesel and fatty acid were fixed too.
It may not be all that busy northbound, but a few cargoes of aromatics have been moving again, including pyrolysis gasoline from Berre, France, Sines, Portugal, Augusta, Sicily, and Kulevi, Georgia, as well as benzene from Skikda, Algeria, and Constanza, Romania. Six thousand five hundred tons of pyrolysis gasoline and toluene shipped from Venice and Priolo, Italy, to Antwerp-Rotterdam-Amsterdam paid close to 300,000. Three thousand tons of base oils were fixed up from the East Mediterranean.
It has been another dull week in the Mediterranean. Even biodiesel has been a little slower than usual, but without it the market would have collapsed completely. Aromatics and caustic trades are quieter, and base oil has almost been invisible this week. Fortunately, owners have begun a programme of dry-docking, with some seven to eight ships currently out of service, which helps balance supply to demand.
As with last week, the transatlantic market is not hugely exciting, yet determined owners have succeeded in achieving substantial premiums over last-done levels, particularly on some larger bits of business. Fixtures include urea ammonia nitrate, ETBE, biodiesel and sulphuric acid. In the smaller sizes, toluene, wax and aniline has been seen. The next requirement for 5,000 tons of paraxylene from Rotterdam to U.S. Atlantic Coast is already quoted.
Apart from possibilities out of Tarragona, Spain, styrene is much quieter along the Far East route. Some phenol and acetone was covered for early November, with the next requirement floated for the second half of November. Ten thousand tons of easy chemicals were quoted from Antwerp-Rotterdam-Amsterdam to Southeast Asia, while 8,000 tons of chemicals from Antwerp-Rotterdam-Amsterdam to four ports in Southeast Asia and the Far East yielded around $920,000-$930,000. A couple of base oil shipments were booked to Singapore, Korea and China, with several shipments of butanediol and glycol-ethers circulated to Japan, Taiwan and Vietnam. Rates have decreased slightly as more vessels have managed to go on berth in November.
Traders into India and the Middle East Gulf have been quoting 10,000 tons of mixed xylenes from Antwerp-Rotterdam-Amsterdam to Sikka, and 19,000 tons of phosphoric acid was quoted to the same destination. Small parcels of base oil and solvents have been seen from the Eastern Mediterranean, including one unlikely parcel from Alexandria, Egypt, to Hamriyah, U.A.E.
There are a couple of domestic routes that are moderately busy, such as intra-Far East where there are a lot of cargoes of paraxylene, benzene, mixed xylenes, toluene, acetone, phenol and solvent naphtha C9, as well as a steady flow of small lots of base oil from Korea. Northbound is also described as being firm, where 10,000 tons of aromatics from Map Ta Phut, Thailand, to South China went in the low- to mid $20s/t, with a subsequent lifting reported to have attained mid $20s/t. Southbound, however, is not busy, and nor is intra-South East Asia, although traders were having difficulty in covering 2,500 tons of base oils from Sri Racha, Thailand, to Port Klang, Malaysia, off prompt dates.
Benzene arbitrage are reckoned to have closed to the U.S., reducing demand on the transpacific export route. Space is not that plentiful, however, which leaves rates suspended where they were for the time being. Space is fairly tight to Europe, and owners claim to have been fixing at quite strong levels. Cargoes of acid, vinyl acetate monomer, phenol, octene and various forms of biodiesel have accounted for some of the space. Enquiries include cargoes of cyclohexane, caustic, sulphuric acid, as well as an unusual enquiry for base oils from Bataam to Alexandria.
Prompt space is fairly scarce in the regional markets along the India and Middle East Gulf route. Owners say that base oil demand appears strong, with several large cargoes from Al Ruwais, U.A.E., to Mumbai and Sharjah, as well as some base oils from Yanbu, Saudi Arabia, to Mumbai and Chennai. Eastbound is not so active, and there is still some space available on a couple of large parcel tankers. Base oils continue to be quoted from Al Ruwais to China. Ten thousand tons methyl tertiarybutyl ether from Mesaieed, Qatar, to Southeast Asia fixed in the low- to mid $40s/t. On the westbound route, a couple of ships have space either to the U.S. Gulf or to Europe, but demand is fairly strong, particularly with benzene and paraxylene. Fifteen thousand tons of caustic is believed to have fixed from Iran to Turkey.
Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached firstname.lastname@example.org +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.