All routes out of the United States are extremely slow right now. Asia is still slow, but a little more demand has been detected recently. Domestic European trades are moving along nicely, but the long-haul routes are floundering.
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Hardly anything is moving to Asia from the U.S. Gulf, at least openly. There have been some under-the-radar type of deals recently, which suggests that rates might be below the notional $50 to $52 per metric ton level quoted for 5,000-ton parcels from Houston to Korea. Styrene is still expected to come back to the table, but will require producers to be a bit more flexible on pricing. Cargoes of ethanol, phenol and yellow grease have been seen, but that is about the sum total of activity this week.
There has been quite a lot of demand along the transatlantic route for July and August, at least according to an owner who claims to be fixing most of it. Unfortunately for the remaining owners, this means there might not be a great deal left, unless the styrene really does begin to flow again, as some traders feel it will. There are also some questions about the benzene arbitrage re-opening again soon, but nothing has hit the market so far. Five thousand tons of chemicals from Mississippi to Antwerp-Rotterdam-Amsterdam was heard to have fixed in the high $40s/t, and 8,500 tons of cumene from Pascagoula, Mississippi, to Antwerp is claimed to have gone in the mid- to high $30s/t region. Three thousand tons of biodiesel from Portsmouth, Virginia, to Sines, Portugal, went at $75/t, and the 6,500 tons of base oils from Paulsboro, U.S., to Riga, Latvia, that was mentioned a few weeks back is reckoned to have achieved mid $60s/t.
Very little is moving into the Caribbean from the U.S., and several ships are sitting around idle. The situation is exacerbated by an oversupply of tonnage in the U.S. Gulf, which would be willing to take some of the ethanol or caustic requirement within the Caribbean, just by way of a delaying tactic.
Ethanol had a quieter week, and caustic is infrequent these days along the route to the east coast of South America. Eighteen thousand tons of vegetable oil from Norfolk, Virginia, to Callao, Peru, was heard to have gone for a lowly rate reported to be in the high $30s/t.
Traders are still looking at sending base oils to India, and there have been moves to send 20,000 tons of methanol from Beaumont, Texas, in addition to the large lot of ethanol quoted last week to the United Arab Emirates. As with all the other routes, rates are under pressure from the abundance of tonnage open in the U.S. Gulf that could use one of these cargoes as a basis on which to go on berth.
Sometimes the beginning of the month can be the busiest time along the North Sea and Baltic route, and it would seem that July has started out like this. Certainly a lot of cargo came out at the same time, for loading at the same time, which put a strain on the limited amount of space available. Consequently, some fairly steep freights have been recorded this week. Fourteen thousand tons of aromatics from the United Kingdom to Antwerp-Rotterdam-Amsterdam, a one day voyage, paid a mighty $17/t, for example. Biodiesel and ethanol have been far and away the most active products, but base oils have also been reasonably busy too.
It has been a flat week on the southbound market, and owners have been complaining about an inability to fill their ships. Routine base oil enquiries have been seen to Italy, but otherwise base oils were as equally dull as the chemicals sector.
Northbound demand improved a touch this week, and as the tonnage supply has tightened, so too have rates advanced. A small 1,800 tons parcel from South Spain to Antwerp-Rotterdam-Amsterdam paid 140,000, for instance. Cargoes of caustic, pyrolysis gasoline, biodiesel, urea ammonia nitrate, glycerine, phosphoric acid and vegetable oil have been either fixed or worked this week.
Plenty of biodiesel requirements in the West Mediterranean have led to higher freights being accomplished. Some of the short hops along the Spanish coast have rewarded owners with levels in the low 70,000s, for example, which represents a 5,000 to 7,000 increase over previous fixtures. In one case, 85,000 was paid. Base oils have been reasonably active again, with shipments seen to most of the usual destinations.
Transatlantic demand is patchy, and rates are softening. Ten thousand tons of sulphuric acid from Hamburg to Savannah, Georgia, is still unfixed, but the 15,000 tons of urea ammonia nitrate from Sillamae, Estonia, to Corpus Christi, Texas, got covered. Small parcels of aromatics have been mentioned from Antwerp-Rotterdam-Amsterdam and Leixoes, Portugal, along with some wax and glycerine. Five thousand tons of paraxylene was fixed from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast, and 10,000 tons base oils were booked from Livorno, Italy, and Cartagena, Spain, to Punta Cardon, Venezuela.
Space is opening up on the Far East route, even among some of the regular carriers. Small lots of acrylonitrile, butanediol, spectrasyn and propylene oxide have been seen, but nothing particularly large, aside from a shipment of urea ammonia nitrate to Australia.
There is a considerable number of ships on berth along the India and Middle East Gulf route which can offer completion space, meaning rates have slipped further. The parcels being quoted are mostly parcels of chemicals, but a small lot of base oils was noted from Greece. Another vessel is currently loading a large slug of base oils in Italy, which is believed to be a relet from another owners contract.
There have been a few more cargo possibilities in most of the domestic areas, but owners are still complaining that it is still too slow and that they have difficulty in filling up. The base oil sector has seen quite a few quotations out of Korea, mostly to China, including one or two larger volumes, as well as smaller parcels down to Singapore and Southeast Asia. Two thousand tons of base oils from Cilacap, Indonesia, to Port Klang, Malaysia, remains unfixed, and the same too for 2,000 tons base oils Sri Racha, Thailand, to Port Klang.
July space remains scarce on the transpacific export route, thanks mainly to large volumes of benzene moving. Traders are now starting to quote their August cargoes, and are seeing rates in the mid $50s/t for 5,000-ton parcels from Korea to the U.S. Gulf. The market gives the appearance of being calm to Europe, but ships are steadily filling, and there is not that much space remaining, particularly space that meets all the oil company approvals.
A lot more enquiry has surfaced in the regional markets, and space is generally pretty tight in the India and Middle East Gulf route, lifting freight levels a little. Base oils are enquiring from Al Ruwais, U.A.E., and Yanbu, Saudi Arabia, into India, and there was a shipment from Iran that arrived in Pipavav, India. Eastbound space is tight for July, and there are several sizeable cargoes of paraxylene and benzene to be shipped from various ports in India. Some of the levels reported are not that strong however – 10,000 tons of methanol from Mesaieed, Qatar, to Southeast Asia allegedly fixed in the low $30s/t, for example. Westbound is busy, with paraxylene and benzene among the requirements noted. There is further interest in shipping methanol, caustic, glycols, acetic acid, vinyl acetate monomer, linear alkyl benzene and methyl tertiarybutyl ether.
This report was originally featured in the July 11 issue of Lube Report Americas.
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.